What tax form you get depends on whether you work and how much you earn
If you receive Social Security Disability Insurance (SSDI), the Social Security Administration will send you a Form SSA-1099-SM (or Form SSA-1099 in some cases) by January 31 each year. This form shows the total SSDI benefits you received in the previous year. You do not automatically owe federal income tax on SSDI alone, but you may owe tax if you have other income—and you need the form to prove how much SSDI you received when you file.
The form arrives in the mail at the address Social Security has on file. If you move, update your address with Social Security before the end of the year so the form reaches you. If you do not receive it by early February, you can request a replacement by calling Social Security at 1-800-772-1213 or visiting your local office.
You will also receive other tax forms if you have income beyond SSDI. If you work, your employer sends a Form W-2. If you have interest, dividends, or other unearned income, you may receive a Form 1099-INT, Form 1099-DIV, or other 1099 forms. All of these go together on your tax return.
Key Takeaways
- Social Security sends Form SSA-1099-SM by January 31 showing your total SSDI benefits for the year.
- You may owe federal income tax on SSDI if your total income (SSDI plus wages, interest, or other income) exceeds the threshold for your filing status.
- If you work while receiving SSDI, you will also receive a Form W-2 from your employer showing wages subject to tax.
- Keep all tax forms together when you file, because the IRS uses them to verify the income you report.
When SSDI counts as taxable income
SSDI by itself is not automatically taxable. However, if your total income crosses a certain threshold, part of your SSDI becomes taxable. The threshold depends on your filing status and whether you are married filing jointly, single, or head of household.
The IRS uses a formula called "combined income" to decide how much SSDI is taxable. Combined income includes your adjusted gross income (wages, interest, dividends, and other income) plus half of your SSDI benefits. If that combined income exceeds the threshold for your filing status, you may owe tax on up to 85 percent of your SSDI benefits.
For example, if you are single and earn $15,000 in wages plus $12,000 in SSDI, your combined income is $15,000 plus half of $12,000 ($6,000), which equals $21,000. If the threshold for single filers is $25,000, you do not owe tax on the SSDI. But if you earned $20,000 in wages instead, your combined income would be $26,000, which exceeds the threshold, and part of your SSDI becomes taxable.
The thresholds have not changed since 1984, so they affect more people each year as wages and benefits rise. The IRS publishes the exact thresholds each year, and a tax professional or the IRS website can tell you whether you fall above or below the line.
How to file your tax return with SSDI income
You file your tax return the same way whether you receive SSDI or not. Gather all your tax forms—the Form SSA-1099-SM, any W-2s from work, and any other 1099 forms—and either file on your own using tax software, work with a tax professional, or use a free filing service.
When you enter your income into tax software or give it to a tax preparer, you will report the SSDI amount from your Form SSA-1099-SM on the line for Social Security benefits. The software or preparer will calculate whether any of it is taxable based on your other income and your filing status. If none of it is taxable, you report the full amount but pay no tax on it.
If you file by paper, you use Form 1040 (the main individual income tax return) and report your Social Security benefits on the line labeled "Social Security benefits." The IRS worksheet that comes with the form walks you through the calculation to see how much, if any, is taxable.
You must file by April 15 of the year following the tax year, unless you request an extension. If you owe tax, paying by the important date avoids penalties and interest.
Free tax filing options if your income is low
If your total income is below a certain threshold, you may be able to file for free using IRS Free File. The threshold changes each year but is usually around $13,000 to $14,000 in total income. Many people receiving SSDI fall below this line, especially if they do not work.
To use IRS Free File, go to IRS.gov and look for the Free File link. You will see a list of tax software companies that offer free filing to people below the income threshold. You create an account, enter your information, and file electronically. The IRS accepts the return and processes it.
If your income is above the Free File threshold or you prefer in-person help, the IRS also funds free tax preparation sites in many communities. Search "VITA" (Volunteer Income Tax information) on IRS.gov to find a site near you. VITA sites serve people with low to moderate income and can prepare your return at no cost.
What happens if you do not file
If you owe tax and do not file, the IRS will eventually contact you. Penalties and interest accumulate, making the debt larger over time. If you owe a significant amount, the IRS can take steps to collect, including reducing future tax refunds or, in rare cases, garnishing wages.
If you do not owe tax—because your SSDI and other income fall below the threshold—you are not required to file. However, filing can be worth it if you are due a refund. Many people who receive SSDI and work part-time have taxes withheld from their wages. If those withholdings are more than the tax you actually owe, filing gets you a refund.
If you have not filed for previous years and are unsure whether you owed tax, a tax professional or VITA site can review your situation and help you file back returns if needed. The IRS generally does not pursue people for unfiled returns if they did not owe tax, but filing protects you and may result in a refund.
Keeping records and updating Social Security
Keep a copy of your tax return and all supporting documents (your Form SSA-1099-SM, W-2s, and any other 1099 forms) for at least three years. The IRS can ask to see them if you are audited, and having them on hand makes the process faster.
If your address changes, update it with Social Security so future tax forms reach you. You can update your address online at ssa.gov, by calling 1-800-772-1213, or by visiting a local Social Security office. If you change your mailing address with the IRS (for example, when you file your tax return), that does not automatically update Social Security's records.
If you work and earn income, report that work to Social Security as well. SSDI has rules about how much you can earn without affecting your benefits, and Social Security needs to know your earnings to calculate whether you stay within those limits. Reporting work does not stop your benefits automatically, but failing to report can result in overpayments that you will have to repay.
Frequently Asked Questions
Do I have to file a tax return if I only receive SSDI and no other income?
No, you do not have to file if SSDI is your only income and the amount is below the filing threshold for your age and filing status. However, if you have any other income (wages, interest, or dividends), you may need to file even if your total income is low. A tax professional or the IRS website can tell you whether you are required to file.
What if I lost my Form SSA-1099-SM?
Call Social Security at 1-800-772-1213 and request a replacement. You can also create a my Social Security account at ssa.gov and view your form online. If you need it quickly, the online version is available when ready and you can print it.
Can I file my taxes electronically if I receive SSDI?
Yes. E-filing is faster than mailing a paper return, and the IRS processes it more quickly. You can e-file through tax software, a tax professional, or a VITA site. You will need your Form SSA-1099-SM and any other income forms to complete the return.
What if some of my SSDI is taxable—how much do I owe?
The amount of tax depends on your total income, your filing status, and your tax bracket. A tax professional or tax software can calculate the exact amount. Generally, if part of your SSDI is taxable, you owe federal income tax on that portion at your regular tax rate, not a special SSDI rate.
Do I owe state income tax on SSDI?
Most states do not tax SSDI benefits, but a few do. Check your state's tax website or ask a tax professional whether your state taxes Social Security benefits. If it does, you may need to file a state return even if you do not owe federal tax.