You must file taxes if your SSDI income plus other income exceeds the threshold for your filing status

The Social Security Administration does not withhold federal income tax from SSDI payments automatically. That means you are responsible for reporting the income yourself, even though you may owe little or no tax. The IRS requires you to file a return if your combined income — SSDI plus wages, interest, dividends, or other earnings — exceeds a threshold that depends on your age and filing status.

For 2024, if you are under 65 and single, you must file if your combined income is $14,600 or more. If you are 65 or older and single, the threshold is $18,150. These thresholds change each year. The IRS counts only 50 percent of your SSDI benefits as taxable income when calculating whether you have crossed the filing threshold, but the full amount of any wages or other earnings counts.

Even if you fall below the threshold, filing a return may benefit you. If you had taxes withheld from wages or are owed a refundable tax credit — such as the Earned Income Tax Credit (EITC) — filing gets you that money back. Many people on SSDI file specifically to claim the EITC, which can result in a refund of several hundred dollars.

Key Takeaways

  • You must file a federal tax return if your combined SSDI and other income exceeds the threshold for your filing status, which is $14,600 for single filers under 65 in 2024.
  • The IRS counts only 50 percent of your SSDI benefits as income when determining whether you must file, but you still report the full amount on your return.
  • You should file even if you do not owe tax if you had income withheld from wages or if you may be owed the Earned Income Tax Credit.
  • Form SSA-1099 arrives by January 31 each year and shows your total SSDI payments; you will need this to complete your tax return.
  • The IRS offers free filing options through VITA sites and IRS Free File if your income is below a certain level, usually around $79,000.

What documents you need before you file

Start by gathering your Form SSA-1099, which Social Security mails to you by January 31 each year. This form shows the total amount of SSDI benefits you received in the previous year. You will need this number to complete your tax return, whether you file on paper or electronically.

If you earned wages from work, collect your Form W-2 from each employer. If you had self-employment income, you will need records of that income and your business expenses. If you received interest or dividends, gather those statements — they usually arrive as Form 1099-INT or Form 1099-DIV. If you made estimated tax payments during the year, have those records available too.

You will also need your Social Security number, date of birth, and filing status. If you are married and filing jointly, you will need the same information for your spouse. If you have dependents, gather their Social Security numbers and dates of birth as well.

How to report SSDI income on your return

SSDI income goes on Form 1040, line 5b (or the equivalent line if you use a different form). You report the full amount of your SSDI benefits from your Form SSA-1099, even though only half of it counts toward the income threshold that determines whether you must file.

The IRS then calculates your taxable Social Security benefits using a worksheet. The worksheet takes your adjusted gross income, adds back half of your SSDI, and compares that total to a base amount ($25,000 if you are single, $32,000 if you are married filing jointly). If your combined income exceeds the base amount, up to 50 percent of your benefits become taxable, or up to 85 percent in some cases if your income is very high.

Most people on SSDI alone — with no other income — will find that none of their benefits are taxable. The taxable portion appears on Form 1040, line 5b, and the full amount of your benefits appears on line 5a. If you use tax software or work with a tax preparer, these calculations are usually done automatically once you enter your Form SSA-1099 information.

Filing for free through VITA and IRS Free File

The IRS operates Volunteer Income Tax information (VITA) sites in most communities, where trained volunteers prepare and file your return at no cost. To find a VITA site near you, visit the IRS website or call 211. VITA serves people with income below a certain threshold — usually around $79,000 — and is especially helpful if you have SSDI plus some wages and want to claim the EITC.

You can also file free through IRS Free File, a program that partners with tax software companies to offer free filing to people below the income threshold. You access Free File through the IRS website. The software walks you through entering your information, calculates your tax, and files electronically. If you are owed a refund, it typically arrives within 21 days of filing.

Both VITA and Free File handle SSDI income correctly and will calculate the taxable portion of your benefits for you. Neither charges a fee. If your income is above the threshold or you have a complex situation, you may need to pay for a tax preparer, though many offer reduced rates for people with disabilities.

What happens if you owe tax on your SSDI

If your combined income is high enough that some of your SSDI becomes taxable, you may owe federal income tax. The amount depends on how much of your benefits are taxable and your overall tax bracket. For most people on SSDI with little other income, the tax owed is small or zero.

You can pay the tax when you file your return. If you cannot pay in full, the IRS allows you to set up a payment plan. You can also request an extension to file your return, though this does not extend the important date to pay — taxes are due by April 15 unless you request an extension.

Some people on SSDI choose to have taxes withheld from their benefits to avoid owing a lump sum at tax time. You can request this by completing Form W-4V and submitting it to Social Security. You can withhold 7, 10, 15, or 25 percent of your monthly benefit. This is optional, but it may help you manage your cash flow if you expect to owe tax.

State income tax and SSDI

Most states do not tax SSDI benefits. However, a few states — including Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, and Vermont — tax some or all of your SSDI income. The rules vary by state and depend on your total income.

If you live in a state that taxes SSDI, you will need to file a state return and report your benefits. Some states follow the federal rule that only 50 percent of benefits are taxable; others tax the full amount or use a different calculation. Check your state's tax authority website or ask a tax preparer about your state's rules.

If you moved during the year, you may owe tax to more than one state. Some states offer credits for taxes paid to another state, but the rules are complex. A tax preparer familiar with your state can help you understand what you owe.

How SSDI and the Earned Income Tax Credit work together

The Earned Income Tax Credit (EITC) is a refundable credit for people with low to moderate earned income. If you work and earn wages while receiving SSDI, you may be able to claim the EITC even if you owe no federal income tax. The credit can result in a refund of several hundred dollars.

The EITC is based on your earned income — wages from work — not on your SSDI. So if you earned $15,000 in wages and received $12,000 in SSDI, your EITC is calculated on the $15,000. The SSDI does not reduce the credit, but it does count toward your total income for purposes of determining whether you are within the income limits.

To claim the EITC, you must file a tax return. You cannot claim it by filing a straightforward return or by not filing at all. If you work part-time or seasonally while on SSDI, filing to claim the EITC is usually worth your time, even if you would otherwise owe no tax.

Frequently Asked Questions

Do I have to file taxes if I only receive SSDI and no other income?

No, not usually. If SSDI is your only income, you fall below the filing threshold in most cases. However, you should file if you had taxes withheld from wages in a previous job or if you think you may be owed the Earned Income Tax Credit. Filing costs nothing through VITA or Free File, so it is worth checking.

What if I did not receive my Form SSA-1099 by January 31?

Contact Social Security at 1-800-772-1213 or visit your local Social Security office. You can request a replacement Form SSA-1099 or ask for a statement of your benefits. You can also file your return without the form if you know your total benefits — Social Security has a record and the IRS can verify it — but having the form makes the process smoother.

Can I file my taxes electronically if I receive SSDI?

Yes. Electronic filing is faster and more accurate than paper filing. You can file through IRS Free File, VITA, a tax preparer, or tax software you purchase yourself. The IRS processes electronic returns within 21 days if you are owed a refund, compared to several weeks for paper returns.

If I owe tax on my SSDI, will it affect my benefits?

No. Owing federal income tax does not change your SSDI payment amount or your may be able to access. The IRS and Social Security are separate agencies. However, if you owe back taxes and do not pay, the IRS can eventually offset your refund or garnish other income, so it is best to address any tax debt promptly.

What if I work and receive SSDI — do I report both on my taxes?

Yes. You report your wages on Form W-2 and your SSDI on Form SSA-1099. Both go on your tax return. Your wages count fully toward your income; only 50 percent of your SSDI counts toward the filing threshold. You may also be able to claim the Earned Income Tax Credit based on your wages, which can result in a refund.