You file taxes on SSDI the same way you file on any other income, but Social Security benefits themselves usually aren't taxable

The key question is whether your benefits are taxable at all. For most people receiving SSDI, the answer is no — Social Security Disability Insurance benefits are not subject to federal income tax. However, if you have other income (wages from work, interest, pensions, or self-employment), you may owe taxes on that income, and you must report it to the IRS.

The IRS uses a formula called "combined income" to determine if any of your Social Security is taxable. Combined income is the sum of your adjusted gross income, nontaxable interest, and half of your Social Security benefits. If your combined income exceeds a certain threshold, a portion of your benefits becomes taxable. For 2024, those thresholds are $25,000 for single filers and $32,000 for married couples filing jointly. These thresholds do not change year to year.

You will receive a Form SSA-1099 from Social Security each January showing the total benefits you received in the previous year. This is the document you use to report your benefits to the IRS. You do not need to do anything with this form except keep it for your records until you file your return.

Key Takeaways

  • Most people on SSDI pay no federal income tax on their benefits, even if they work part-time.
  • You must report other income (wages, self-employment, interest, pensions) on your tax return regardless of whether your benefits are taxable.
  • Social Security sends you a Form SSA-1099 each January showing your total benefits for the previous year.
  • If your combined income exceeds $25,000 (single) or $32,000 (married filing jointly), part of your benefits may be taxable.
  • You file using the same forms as anyone else — Form 1040 and Schedule 1 if you have other income.

When your SSDI benefits become taxable

Your benefits become taxable only if your combined income crosses the threshold for your filing status. Combined income includes your adjusted gross income (wages, self-employment income, taxable interest, dividends, and certain other sources) plus half of your Social Security benefits.

For example, if you are single and earn $20,000 in wages, your combined income is $20,000 plus half your SSDI benefits. If you received $12,000 in SSDI that year, half of that is $6,000, making your combined income $26,000. This exceeds the $25,000 threshold by $1,000. You would then owe tax on up to 50% of your excess combined income — in this case, up to $500 of your benefits would be taxable.

The math is more complex if your combined income is very high. If combined income exceeds $34,000 (single) or $44,000 (married filing jointly), up to 85% of your benefits can become taxable. However, most people on SSDI do not reach these higher thresholds.

How to report your income and benefits on your tax return

You report your SSDI benefits on Form 1040, the main federal income tax form. On line 5a, you enter the total amount from your Form SSA-1099. On line 5b, you enter the taxable portion of your benefits (which may be zero). The IRS worksheet or tax software calculates this for you.

If you have other income — wages, self-employment income, or investment income — you report that separately. Wages go on line 1 (from your W-2 forms). Self-employment income goes on Schedule C and then to line 3 of Form 1040. Interest and dividends go on lines 2a and 2b.

If your only income is SSDI and it is not taxable, you may not need to file a return at all. However, if you have any other income, you must file. The IRS has income thresholds that determine whether you must file; for 2024, a single person with gross income of $14,600 or more must file. Check the IRS website or use their interactive tool to confirm whether you must file based on your specific situation.

Working while on SSDI and reporting your wages

If you work and receive SSDI, you report your wages on your tax return just as anyone else does. Your employer sends you a W-2 form by January 31 showing your wages and taxes withheld. You attach the W-2 to your Form 1040 and report the wages on line 1.

Working does not automatically make your SSDI benefits taxable — it depends on your total combined income. Many people work part-time while on SSDI and still have no taxable benefits because their combined income stays below the threshold. However, your wages do count toward that threshold, so working increases the chance that some benefits become taxable.

If you are self-employed (running your own business), you report your net self-employment income on Schedule C and then transfer it to Form 1040. Self-employment income also counts toward combined income. You may owe self-employment tax on this income in addition to income tax.

Filing your return: paper, software, or free help

You can file your return in three ways: by mail, using tax software, or with help from a tax professional or volunteer.

The IRS offers Free File, a program that lets you file for free using commercial tax software if your income is below a certain threshold. For 2024, Free File is available to people with income under $79,000. You access Free File through the IRS website (irs.gov) and choose from a list of participating software providers. The software walks you through your return and calculates your tax.

If you prefer in-person help, the IRS funds VITA (Volunteer Income Tax information) sites in most communities. VITA volunteers are trained and certified to prepare returns for free. You can find a VITA site near you through the IRS website or by calling 211. VITA sites are especially helpful if you have questions about whether your benefits are taxable or whether you must file.

You can also hire a tax professional — a CPA, enrolled agent, or tax preparer — to file your return. This costs money, but it may be worth it if your situation is complex or if you are unsure about reporting your benefits correctly.

Keeping records and what to do with your Form SSA-1099

Keep your Form SSA-1099 and any other income documents (W-2s, 1099s, bank statements) for at least three years after you file. The IRS can audit returns from previous years, and you will need these documents to prove what you reported.

Do not mail your Form SSA-1099 to the IRS with your return. The IRS already has a copy from Social Security. You keep your copy for your records. If you file electronically using tax software or a tax professional, you enter the information from the form into your return, but you do not attach the physical document.

If you lose your Form SSA-1099, you can request a replacement from Social Security. Call 1-800-772-1213 or visit ssa.gov and use the "my Social Security" portal to request a duplicate. Social Security can mail you a replacement or let you view it online.

State income tax on SSDI benefits

Most states do not tax SSDI benefits, but a few do. The states that tax Social Security benefits are Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, and Vermont. If you live in one of these states, you may owe state income tax on your benefits even if you owe no federal tax.

Each state has its own rules about how much of your benefits are taxable and what income thresholds explore. If you live in a state that taxes Social Security, contact your state tax authority or use your state's tax software to find out whether you must file a state return and how much of your benefits are taxable under state law.

Frequently Asked Questions

Do I have to file a tax return if I only receive SSDI and no other income?

No. If your only income is SSDI and it is not taxable, you do not have to file a federal return. However, if you have any other income — wages, self-employment, interest, or pensions — you must file if that income exceeds the IRS threshold for your filing status.

What if I worked part of the year and received SSDI the rest of the year?

You report both your wages and your SSDI benefits on the same return. Your wages count toward your combined income, which determines whether any of your benefits are taxable. You will receive a W-2 from your employer and a Form SSA-1099 from Social Security; both go on your Form 1040.

Can I file my taxes online if I receive SSDI?

Yes. You can use IRS Free File if your income is under $79,000, or you can use commercial tax software. Tax software is designed to handle SSDI benefits and will calculate whether any of your benefits are taxable based on your other income.

What happens if I owe taxes on my SSDI benefits?

If part of your benefits is taxable, you owe federal income tax on that amount just as you would on any other income. You can pay the tax when you file your return, or you can request that Social Security withhold taxes from your monthly benefit payment. To set up withholding, complete Form W-4V and send it to your local Social Security office.

Do I need to report my SSDI benefits if they are not taxable?

You still enter your benefits on your Form 1040 (line 5a), but the taxable amount (line 5b) will be zero. This tells the IRS that you received benefits and that you calculated correctly that none are taxable. Always report your benefits even if they are not taxable.