Whether you have to file taxes on SSDI depends on your total income, not on receiving benefits alone

Social Security Disability Insurance (SSDI) itself is not taxable income. You do not owe federal income tax on your SSDI payments just because you receive them. However, you may have to file a tax return anyway if you have other income — wages from work, self-employment earnings, interest, dividends, or rental income — that pushes your total above the filing threshold for your age and filing status.

The Internal Revenue Service (IRS) sets a threshold each year. If your combined income (SSDI plus other sources) exceeds that threshold, you must file. Even if you do not have to file, you may want to file anyway if taxes were withheld from other income, because you could receive a refund.

The complication arises when you have both SSDI and other income. A portion of your SSDI can become taxable if your "combined income" — a specific calculation the IRS uses — exceeds certain limits. This is separate from whether you must file at all.

Key Takeaways

  • SSDI payments themselves are never taxable, but you must file a return if your other income (wages, self-employment, interest) exceeds the IRS filing threshold for your age and status.
  • If you have both SSDI and other income, up to 85 percent of your SSDI can become taxable depending on your combined income level, which is calculated differently than your adjusted gross income.
  • The IRS filing threshold varies by age and filing status and changes each year; for 2024, a single person under 65 with only SSDI income does not have to file.
  • If you work while on SSDI, you must report your earnings to Social Security, and those earnings may trigger tax filing requirements even if they do not exceed the standard threshold.
  • Filing a return when you are not required to can be worthwhile if you had taxes withheld, because you may receive a refund.

The IRS filing threshold and SSDI income

The IRS sets a minimum income level below which you do not have to file a federal return. This threshold depends on your age, filing status, and whether you are claimed as a dependent. For 2024, a single person under age 65 with only SSDI income does not have to file because SSDI is not counted as earned income for this purpose.

However, if you are age 65 or older, the threshold is higher, and if you have other income sources, the rules change. A single person age 65 or older in 2024 with only SSDI does not have to file, but if that same person has $1,550 or more in other income (such as interest or part-time wages), they must file.

These thresholds are set by the IRS and change annually. You can find the current year's thresholds on the IRS website or by contacting the IRS directly. The key point is that SSDI alone does not trigger a filing requirement, but other income does.

When SSDI becomes taxable income

Even though SSDI is not taxable on its own, it can become partially taxable if your combined income exceeds certain limits. The IRS uses a formula that includes SSDI plus half of your SSDI plus other income sources. This sum is called your "combined income," and it is different from your adjusted gross income.

If your combined income exceeds $25,000 (single filer) or $32,000 (married filing jointly), you may have to include up to 50 percent of your SSDI in your taxable income. If your combined income exceeds $34,000 (single) or $44,000 (married filing jointly), you may have to include up to 85 percent of your SSDI in your taxable income.

This means that if you earn wages or have significant other income while on SSDI, a portion of your SSDI payments becomes subject to federal income tax. The exact amount depends on how much your combined income exceeds the threshold. Many people on SSDI with little or no other income never reach these thresholds and therefore never pay tax on their benefits.

SSDI and work incentives: how earnings affect your tax situation

If you work while receiving SSDI, your earnings count toward the combined income calculation that determines whether SSDI becomes taxable. Social Security has work incentive programs — such as the Trial Work Period and Extended may be able to access Period — that allow you to test your ability to work without when ready losing benefits. However, these programs do not change your tax filing obligations.

You must report your work earnings to Social Security, and those same earnings are reported to the IRS on a W-2 form (if you are an employee) or Schedule C (if you are self-employed). Both the Social Security Administration and the IRS will see your income. If your earnings push your combined income above the SSDI taxability thresholds, you will owe tax on a portion of your SSDI.

Additionally, if you are self-employed, you may owe self-employment tax on your net earnings, even if your total income does not require you to file a regular income tax return. Self-employment tax funds Social Security and Medicare, and the threshold for self-employment tax is lower than the threshold for income tax filing.

How to calculate whether you must file

Start by adding up all your income sources for the year: SSDI, wages, self-employment income, interest, dividends, rental income, and any other sources. Do not include SSDI in this initial sum if it is your only income.

Next, compare your non-SSDI income to the IRS filing threshold for your age and filing status. If your non-SSDI income alone exceeds the threshold, you must file. If it does not, you do not have to file based on the standard threshold.

However, if you have self-employment income of $400 or more, you must file regardless of your total income, because you owe self-employment tax. If you had taxes withheld from wages or other income, you may want to file even if you are not required to, so you can claim a refund.

State income tax and SSDI

Federal tax rules do not explore to state income tax. Some states do not tax SSDI at all, while others may tax a portion of it under their own rules. A few states — including Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, and Vermont — tax SSDI under certain circumstances, though many have exemptions or exclusions that protect most SSDI recipients.

You will need to check your state's tax rules separately. Your state tax return may have different filing thresholds and different rules about whether SSDI is taxable. Contact your state's department of revenue or tax authority to learn whether you must file a state return and whether any of your SSDI is taxable under state law.

What to do if you are unsure whether to file

If you are uncertain whether your income requires you to file, the safest approach is to file anyway. Filing when you are not required to does not create a penalty, and if taxes were withheld from your wages, you may receive a refund. The IRS will not penalize you for filing a return you were not required to file.

You can file using tax software, a tax preparer, or by contacting the IRS directly. Many tax preparation services offer free filing for people with low to moderate income. The IRS also operates the Volunteer Income Tax information (VITA) program, which provides free tax help to people who meet income limits.

Keep records of all your income for the year, including your SSDI statement (Form SSA-1099, which Social Security sends in January), any W-2 forms from employers, and documentation of other income. These documents will help you or a tax preparer determine your filing obligation accurately.

Frequently Asked Questions

Do I have to report my SSDI to the IRS?

You do not have to report SSDI as income if it is your only income and you are not required to file a return. However, if you file a return for any reason, you should list your SSDI amount (shown on Form SSA-1099) on your return, even though it is not taxable. If you have other income that makes SSDI taxable, you must include the taxable portion on your return.

What if I work part-time and receive SSDI?

Your part-time wages count toward the combined income calculation. If your wages plus half your SSDI plus other income exceeds $25,000 (single filer), a portion of your SSDI becomes taxable. You must report your wages to both Social Security and the IRS. Report your earnings to Social Security within the month you earn them to avoid overpayment issues.

Can I get a refund if I file taxes on SSDI?

Yes, if taxes were withheld from your wages or other income, you may receive a refund even if you owe no tax on your SSDI. Filing a return allows you to claim that refund. You can also claim tax credits, such as the Earned Income Tax Credit, if you work and meet the income limits.

Does filing taxes affect my SSDI benefits?

Filing a tax return does not change your SSDI benefit amount. However, if you work and earn income, Social Security uses your earnings to determine whether you continue to meet the medical and work-related requirements for benefits. Report your work earnings to Social Security separately from your tax filing.

What if I did not file taxes in previous years?

If you did not file in prior years and believe you were required to, you can file amended returns for those years. Contact the IRS or a tax professional to discuss your situation. Filing late returns may result in penalties and interest, but the IRS sometimes waives penalties for people with reasonable cause, including those with disabilities.