Whether you must file taxes on SSDI depends on your total income
You may have to file a federal tax return even if SSDI is your only income, but not always. Social Security Disability Insurance itself is not taxed. However, if you have other income — wages from work, interest, dividends, or other benefits — you might cross the threshold where the IRS requires you to file. The threshold changes each year and depends on your age and filing status.
The IRS uses a formula that includes your SSDI plus other income. If your combined income exceeds a certain amount, you must file. Even if you do not have to file, filing can sometimes work in your favor — you might get a refund or a tax credit you would otherwise miss.
The safest approach is to add up all your income sources and compare it to the current year's filing threshold. The IRS publishes these thresholds on its website each January, and the Social Security Administration also provides worksheets to help you figure out whether you need to file.
Key Takeaways
- SSDI payments themselves are not taxable income, but other income you receive may push you over the filing threshold.
- You must file a return if your total income — SSDI plus wages, interest, and other sources — exceeds the IRS threshold for your age and filing status.
- The IRS threshold changes each year; check the current year's amount before deciding whether to file.
- Filing even when not required can sometimes result in a refund or tax credits like the Earned Income Tax Credit.
- The Social Security Administration provides a worksheet to help you calculate whether your income requires you to file.
How SSDI income is treated for tax purposes
SSDI payments are generally not subject to federal income tax. This is different from some other benefits — for example, certain portions of regular Social Security retirement benefits can be taxed depending on your total income. But SSDI itself does not count as taxable income on your federal return.
However, the IRS does count SSDI when calculating whether other income you receive is taxable. This is called "combined income." If you work part-time, receive interest from a savings account, or have rental income, those amounts are added to your SSDI to determine your total. That total is what the IRS compares against the filing threshold.
State taxes vary. Some states do not tax SSDI at all. Others may tax it under certain circumstances. Check your state's tax authority website or ask a tax preparer about your state's specific rules.
What income counts toward the filing threshold
The IRS filing threshold includes several types of income beyond SSDI. Wages from any job — whether full-time, part-time, or self-employment — count. Interest from bank accounts, savings bonds, or CDs counts. Dividends from stocks count. Rental income, capital gains, and income from a business all count.
Some income does not count. Gifts do not count. Loans do not count. Supplemental Security Income (SSI) does not count toward the SSDI filing threshold, though SSI has its own separate rules. Refunds of taxes you paid in previous years do not count.
If you are unsure whether a particular source of money counts as income, the IRS Publication 17 (Your Federal Income Tax) lists what does and does not count. You can also call the IRS at 1-800-829-1040 to ask about a specific situation.
The annual filing threshold and how to find yours
The IRS sets a minimum income level each year. If your total income is below that level, you generally do not have to file. The threshold depends on three things: your age (whether you are 65 or older), your filing status (single, married filing jointly, head of household, and so on), and the year.
For 2024, a single person under 65 with only SSDI income does not have to file. But a single person under 65 with SSDI plus $14,600 or more in other income must file. A single person 65 or older with SSDI plus $18,600 or more in other income must file. These numbers increase slightly each year.
The IRS publishes the current year's thresholds on its website at irs.gov, usually by January. You can also find them in IRS Publication 17. The Social Security Administration website also lists the thresholds and provides a worksheet to help you calculate your combined income.
When you should file even if you do not have to
Even if your income is below the filing threshold, filing a return can put money back in your pocket. If you had taxes withheld from wages during the year, you may get a refund. If you worked and earned income, you might be able to claim the Earned Income Tax Credit (EITC), which can result in a substantial refund even if you owe no tax.
You may also be able to claim the Child Tax Credit, the American Opportunity Tax Credit for education expenses, or other credits. Some of these credits are "refundable," meaning you can get money back even if you have no tax liability. To claim them, you must file a return.
If you are not sure whether filing would help you, a free tax preparation service can review your situation. The IRS Free File program offers free tax software to people with incomes below a certain level. VITA (Volunteer Income Tax information) sites offer free tax help in person at libraries, community centers, and nonprofits across the country.
How to report SSDI on your tax return
If you do file a return, SSDI appears on your tax form but does not increase your tax. You will receive a form SSA-1099 from Social Security each January showing your SSDI payments for the previous year. This form goes in your records but is not filed with the IRS.
On your federal return itself, you report your SSDI amount on the appropriate line of your form 1040 or 1040-SR (for people 65 and older). The form then excludes it from your taxable income. You only report and pay tax on your other income — wages, interest, self-employment income, and so on.
If you use tax software or work with a tax preparer, you will enter your SSDI amount when prompted. The software or preparer will handle the calculation automatically. You do not need to do anything special; just provide the amount shown on your SSA-1099.
What happens if you do not file when you should
If you owe tax and do not file, penalties and interest begin to accumulate. The failure-to-file penalty is usually 5 percent of the unpaid tax for each month the return is late, up to 25 percent. Interest is charged on both the tax and the penalty. These charges grow quickly.
If you realize you should have filed in a previous year, you can still file that return now. The IRS generally does not pursue people for not filing if they had no tax liability — meaning they owed nothing. But if you had taxes withheld or are owed a refund, filing late means you are straightforward delaying money that belongs to you. Refunds can usually be claimed for up to three years after the filing important date.
If you are unsure whether you owed tax in a previous year, a tax preparer or the IRS can help you figure it out. It is better to file late than not to file at all.
Frequently Asked Questions
Can I get a refund if I file taxes on SSDI?
Yes, if you had taxes withheld from wages or other income during the year, you may receive a refund. You might also receive a refund through tax credits like the Earned Income Tax Credit, even if you owe no tax. Filing is the only way to claim these credits.
Do I have to report SSDI to the IRS every year?
You must file a return only if your total income exceeds the IRS threshold for your age and filing status. If your income is below the threshold, you do not have to file. However, if you have other income sources, you should still check the threshold each year, as it changes.
What if I work part-time and receive SSDI?
Your wages plus your SSDI count toward the filing threshold. You must file if your combined income exceeds the threshold. You will pay tax only on your wages, not on the SSDI itself. Be aware that earning above a certain amount may also affect your SSDI benefits under Social Security's work incentive rules.
Is there a penalty for filing taxes when I do not have to?
No. Filing when you are not required to file carries no penalty. In fact, filing voluntarily can result in a refund or tax credits you would otherwise miss. There is no downside to filing if you think you might benefit.
Where can I get help figuring out if I need to file?
The IRS Free File program offers free tax software based on income. VITA sites provide free in-person tax help. The Social Security Administration website has a worksheet to calculate your combined income. You can also call the IRS at 1-800-829-1040 with questions about your specific situation.