Whether you report SSDI depends on your total income and filing status

If you receive Social Security Disability Insurance (SSDI), you may owe federal income tax on part of your benefits — but only if your combined income exceeds a certain threshold. Combined income means your adjusted gross income plus nontaxable interest plus half your SSDI benefits. The threshold depends on whether you file as single, married filing jointly, or married filing separately.

For 2024, if you file as single and your combined income is over $25,000, you may have to report some of your SSDI as taxable income. If you file married filing jointly, the threshold is $32,000. If you file married filing separately, you almost always report some benefits as taxable. These thresholds do not change year to year — they were set in 1983 and have remained the same since.

The Social Security Administration sends you a Form SSA-1099-SM each January showing how much SSDI you received in the previous year. This form is what you use to calculate whether any of your benefits are taxable.

Key Takeaways

  • You report SSDI on your federal tax return only if your combined income (adjusted gross income plus half your benefits) exceeds $25,000 (single) or $32,000 (married filing jointly).
  • The Social Security Administration sends Form SSA-1099-SM in January, which shows your total SSDI for the previous year and is required to calculate your tax liability.
  • You use a worksheet in IRS Publication 915 to determine exactly how much of your SSDI is taxable, because the calculation is not straightforward.
  • State income tax treatment of SSDI varies — some states do not tax SSDI at all, while others follow federal rules or have their own thresholds.

How to calculate the taxable portion of your SSDI

The IRS does not tax all of your SSDI once you cross the income threshold. Instead, you calculate how much is taxable using a specific formula in IRS Publication 915, which the IRS publishes free on its website each year. The formula is complex because it involves two separate calculations, and you report whichever results in a lower taxable amount.

Start by gathering your Form SSA-1099-SM, your W-2 forms if you worked, and statements of any other income (interest, dividends, rental income, pensions). Then follow the worksheet in Publication 915 line by line. The worksheet walks you through adding half your SSDI to your other income, comparing that total to the thresholds, and determining the taxable portion. Most people find it easier to use tax software or work with a tax preparer who can run the calculation, because doing it by hand is error-prone.

If you owe tax on your SSDI, you report the taxable amount on Form 1040, line 5b (for the 2024 tax year). You do not report it separately — it goes into your regular income total.

When you receive Form SSA-1099-SM and what it shows

Social Security mails Form SSA-1099-SM to you by January 31 each year. The form shows the total SSDI you received in the previous calendar year in box 5. If you did not receive SSDI for the entire year — for example, if your benefits started in June — the form will show only the amount from June onward.

You need this form to file your taxes, so keep it in a safe place. If you lose it or do not receive it by early February, you can request a replacement by calling Social Security at 1-800-772-1213 or by visiting your local Social Security office. You can also view your Form SSA-1099-SM online through your my Social Security account at ssa.gov.

Do not rely on the form to tell you whether your benefits are taxable — it only shows what you received. The form itself does not calculate your tax liability. You must do that calculation yourself using Publication 915 or with help from a tax preparer.

State income tax and SSDI

Thirteen states do not tax SSDI at all, regardless of your income level. These states are Illinois, Iowa, Kansas, Louisiana, Massachusetts, Michigan, Mississippi, Missouri, New York, Ohio, Pennsylvania, and Tennessee. If you live in one of these states, you do not report SSDI on your state return even if you report it on your federal return.

Other states follow federal rules — if you owe federal tax on your SSDI, you also owe state tax. A few states have their own thresholds that differ from the federal ones. Check your state's tax authority website or ask a tax preparer in your state what the rules are, because state rules change and vary significantly.

What to do if you did not pay taxes during the year

If you receive only SSDI and no other income, and your combined income is below the threshold, you owe no federal tax and do not have to file a return. However, if you have other income — from work, a pension, interest, or other sources — you may still have to file even if your SSDI is not taxable.

If you discover when you file that you owe tax on SSDI you received but did not pay tax on during the year, you can pay the full amount when you file your return. You do not have to make estimated quarterly payments for SSDI, unlike some other income sources. If you prefer, you can also ask Social Security to withhold federal income tax from your SSDI payments going forward by completing Form W-4V and submitting it to Social Security.

Withholding is optional, but many people choose it to avoid a large tax bill at the end of the year. If you elect withholding, Social Security will hold back a percentage of your monthly benefit (you choose 7%, 10%, 15%, or 25%) and send it to the IRS on your behalf.

What happens if you file late or make a mistake

If you file your tax return late, you may owe penalties and interest on any tax you owe on your SSDI. The IRS charges a failure-to-file penalty and a failure-to-pay penalty if you do not file by the important date or do not pay the tax you owe. If you made an honest mistake on a prior year's return and did not report SSDI that should have been reported, you can file an amended return using Form 1040-X for that year.

You have three years from the original due date to file an amended return and claim a refund if you overpaid. If you owe additional tax, there is no time limit — the IRS can assess it at any time, though they typically focus on recent years. If you are unsure whether you filed correctly in a prior year, a tax preparer or the IRS can help you review your return.

Frequently Asked Questions

Do I have to file a tax return if I only receive SSDI?

Only if your combined income exceeds the threshold for your filing status. If you receive only SSDI and no other income, and your combined income is below $25,000 (single) or $32,000 (married filing jointly), you do not have to file. If you have other income, you may have to file even if your SSDI is not taxable.

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

Your work income counts toward your combined income total. Add your wages, your SSDI, and any other income together, then compare to the threshold. You will likely owe tax on at least some of your SSDI if you worked, because your combined income will be higher.

Can I deduct medical expenses related to my disability from my taxable SSDI?

No. SSDI is not treated differently from other income for deduction purposes. You can deduct medical expenses only if you itemize deductions and they exceed 7.5% of your adjusted gross income. The fact that the expenses relate to your disability does not change this rule.

What if Social Security withholds taxes from my SSDI but I do not owe any tax?

You will receive a refund when you file your return. The withheld amount will be shown on your Form SSA-1099-SM, and you will report it on your tax return. If you withheld too much, you can adjust the withholding percentage by submitting a new Form W-4V to Social Security.

Do I need to report SSDI on my return if I live outside the United States?

Yes, if you are a U.S. citizen or resident alien, you must report SSDI on your federal return using the same rules. If you live in a country with a tax treaty with the United States, special rules may explore. Consult a tax preparer familiar with expatriate taxes or contact the IRS directly.