You may not have to report SSDI on your taxes, but the answer depends on whether you have other income

Whether you report Social Security Disability Insurance (SSDI) on your federal tax return depends on your total income for the year. If SSDI is your only income and it stays below a certain threshold, you do not file a return. If you have wages, self-employment income, or other earnings alongside SSDI, the rules change — you may owe taxes on part of your SSDI benefit even if your total income is modest.

The IRS treats SSDI differently than regular Social Security retirement benefits in one key way: up to 85 percent of your SSDI can be taxable, whereas retirement benefits have a lower taxable threshold. This matters because it means you cannot straightforward add your SSDI amount to your other income and compare it to the standard filing threshold. You have to calculate "combined income," which includes half of your SSDI plus all other income sources.

The Social Security Administration sends you a Form SSA-1099 each January showing how much SSDI you received the previous year. This form is your starting point for determining whether you owe taxes. You will need it to complete your return or to confirm you do not have to file one.

Key Takeaways

  • If SSDI is your only income and falls below the filing threshold for your age and filing status, you do not have to file a federal tax return.
  • If you have wages or self-employment income, you must calculate "combined income" (half your SSDI plus all other income) to determine if you owe taxes on part of your benefit.
  • The IRS uses different thresholds for SSDI than for regular income, so you cannot straightforward compare your SSDI amount to the standard filing requirement.
  • You receive a Form SSA-1099 each January showing your SSDI for the prior year; keep this form to file your return or prove you do not need to file.

Filing thresholds when SSDI is your only income

If you received SSDI and had no other income during the year, you do not file a federal return if your SSDI was below a certain amount. That amount depends on your age and filing status. For 2024, a single person under 65 with only SSDI income does not file if the benefit was under $14,600. A single person 65 or older does not file if SSDI was under $18,150. These thresholds change each year, and married couples filing jointly have higher limits.

The key word here is "only." If you received even $1 in wages, self-employment income, interest, dividends, or other earnings, the threshold changes. You move into the second set of rules, described below. Many people with SSDI also work part-time or receive other income, so this scenario applies to fewer people than it might seem.

Even if you do not have to file, you may want to file anyway if you paid taxes through withholding or if you are owed a refund. Filing is voluntary when you are below the threshold, but filing can put money back in your pocket.

How combined income works when you have other earnings

If you have wages, self-employment income, or other earnings alongside SSDI, the IRS requires you to calculate your combined income. This is not the same as your total income. Combined income is defined as your adjusted gross income plus nontaxable interest plus half of your SSDI benefit.

Here is a concrete example: suppose you earned $20,000 in wages and received $12,000 in SSDI during the year. Your combined income is $20,000 (wages) plus $6,000 (half of SSDI) plus zero (no nontaxable interest) = $26,000. You then compare this $26,000 figure to the IRS threshold for your filing status. For a single person under 65 in 2024, the threshold is $14,600. Because your combined income exceeds the threshold, you must file a return.

Once you file, the IRS uses a formula to determine how much of your SSDI is actually taxable. The formula is complex, but the outcome is that some or all of your SSDI may be subject to income tax, depending on how much other income you have. The more non-SSDI income you earn, the more of your SSDI becomes taxable.

When part of your SSDI becomes taxable income

The IRS taxes SSDI in two tiers. The first tier is straightforward: if your combined income exceeds $25,000 (or $32,000 if married filing jointly), up to 50 percent of your SSDI may be taxable. The second tier kicks in if your combined income exceeds $34,000 (or $44,000 if married filing jointly); at that point, up to 85 percent of your SSDI may be taxable.

This does not mean all of your SSDI is taxed at once. The IRS calculates the taxable portion using a specific formula that considers how much your combined income exceeds the first threshold. For most people with modest other income, the taxable portion of SSDI is much less than the maximum 85 percent.

Example: you earned $30,000 in wages and received $12,000 in SSDI. Your combined income is $36,000. This exceeds both thresholds, so you are in the second tier. The IRS will calculate that a portion of your SSDI — likely between 50 and 85 percent of it — is taxable. The exact amount depends on the formula, but it will be less than the full $12,000.

What to do with your Form SSA-1099

In January, the Social Security Administration mails you a Form SSA-1099 showing the total SSDI you received in the prior calendar year. This form goes to you and to the IRS. You use it to complete your federal tax return or to document that you do not have to file one.

Keep your Form SSA-1099 with your tax records. If you file a return, you will reference the amount shown on Box 5 of the form (the net SSDI benefit). If you do not file a return because your income is below the threshold, keep the form anyway — it serves as proof of your income if the IRS ever asks.

If you do not receive a Form SSA-1099 by early February, contact Social Security at 1-800-772-1213 or visit your local Social Security office. You need this form to file accurately, and Social Security can reissue it or provide the information another way.

State and local taxes on SSDI

Federal tax rules are one piece of the picture. Some states also tax SSDI, though most do not. If you live in Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, or Vermont, your state may tax part of your SSDI benefit. The rules vary by state, and some states exempt SSDI for people below a certain income level.

Check your state's tax authority website or contact them directly to learn whether SSDI is taxable in your state. If it is, you will file a state return using similar combined-income rules as the federal return. A few states also have local income taxes that may explore to SSDI; this is rare but worth checking if you live in a city or county with its own tax.

Reporting SSDI on your return

If you file a federal return and part of your SSDI is taxable, you report it on Form 1040, the main individual income tax return. The taxable portion of your SSDI goes on line 5b (for 2024; line numbers change yearly). You do not report the full SSDI amount — only the portion the IRS determines is taxable based on your combined income.

Many people use tax software or a tax preparer to calculate the taxable portion of SSDI, because the formula is not intuitive. If you prepare your own return, the IRS provides a worksheet in the Form 1040 instructions to help you calculate it. If you use a tax preparer, bring your Form SSA-1099 and all other income documents so they can do the calculation correctly.

Frequently Asked Questions

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

No, not if your SSDI was below the filing threshold for your age and filing status. For 2024, a single person under 65 does not file if SSDI was under $14,600. However, you may choose to file if you had taxes withheld or expect a refund.

What if I work part-time and also receive SSDI?

You must file a return if your combined income (wages plus half your SSDI) exceeds the threshold. You will likely owe taxes on part of your SSDI. Use your Form SSA-1099 and your W-2 to calculate combined income and determine your filing requirement.

Can I reduce the amount of SSDI that is taxable?

No. The taxable portion is determined by a formula based on your combined income. The only way to reduce it is to reduce your other income, which is not practical for most people. Plan ahead if you know you will have significant other income in a given year.

What happens if I do not report SSDI on my taxes when I should have?

The IRS already has your Form SSA-1099, so they know you received SSDI. If you should have filed and did not, the IRS may contact you. It is better to file even if you owe a small amount than to ignore the requirement. If you missed a prior year, you can file an amended return.

Does reporting SSDI on my taxes affect my benefit amount?

No. Filing a tax return and reporting taxable SSDI does not change how much SSDI you receive each month. Your benefit is set by Social Security based on your work history and disability status, not by your tax filing.