Where SSDI appears on your tax forms

If you received a Form SSA-1099-SM from Social Security, that is the document that reports your SSDI payments for the tax year. You do not file this form with the IRS — instead, you use the information on it to fill in your own tax return. The amount shown on box 5 of the SSA-1099-SM is what goes on your federal income tax return, even if you did not owe tax on it.

On your Form 1040 (the main federal income tax form), SSDI income goes on line 5b under "Social Security benefits." This is separate from line 5a, which is for regular Social Security retirement or survivor benefits. The IRS distinguishes between them because the tax rules differ slightly depending on which type of benefit you receive.

You will also need to complete Worksheet A (or Worksheet B if you are married filing jointly and your spouse also received benefits) to calculate how much of your SSDI is actually taxable. This worksheet accounts for your other income and determines whether any of your benefits cross the threshold that triggers taxation.

Key Takeaways

  • Report your SSDI amount from Form SSA-1099-SM on line 5b of Form 1040, even if none of it is taxable.
  • Use IRS Worksheet A to calculate the taxable portion based on your combined income from all sources.
  • If your combined income is below the first threshold ($25,000 single, $32,000 married filing jointly), your SSDI is not taxable and you still report it on line 5b.
  • If you have other income (wages, interest, pensions), that income counts toward the threshold that determines whether SSDI becomes taxable.
  • State tax rules vary — some states do not tax SSDI at all, while others follow federal rules or have their own thresholds.

The combined income thresholds that determine taxation

The IRS uses a calculation called combined income to decide whether any of your SSDI is taxable. Combined income is your adjusted gross income (AGI) plus nontaxable interest plus half of your Social Security benefits (including SSDI). This number determines which of two thresholds you fall into.

For a single filer, if combined income is $25,000 or less, none of your SSDI is taxable. If combined income is between $25,001 and $34,000, up to 50 percent of your benefits may be taxable. If combined income is over $34,000, up to 85 percent of your benefits may be taxable. For married couples filing jointly, the thresholds are $32,000 and $44,000.

The word "may" matters here: the actual taxable amount depends on the specific formula in Worksheet A, not just which bracket you land in. Even if you exceed a threshold, the worksheet prevents you from paying tax on more than 85 percent of your benefits in any year. This is a hard cap built into the law.

How other income affects your SSDI tax bill

Any income you earn during the year — wages from work, interest from a savings account, distributions from a retirement account, rental income, or pension payments — counts toward your combined income. This means that even small amounts of other income can push you over a threshold and make some of your SSDI taxable.

This is one reason why understanding work incentives matters if you are working while on SSDI. Certain types of work-related income, such as earnings under the Plan to Achieve Self-Support (PASS) program or impairment-related work expenses (IRWE), are excluded from the combined income calculation. If you are working, ask Social Security whether any of your earnings may have access to for these exclusions before you file taxes.

Nontaxable income — such as Supplemental Security Income (SSI), workers' compensation, or certain veterans benefits — does not count toward combined income. However, nontaxable interest (such as interest from municipal bonds) does count, which can surprise people who think "nontaxable" means it does not matter for this calculation.

Filing requirements when SSDI is your only income

If SSDI is your only income for the year and the amount is below the standard deduction for your filing status, you are not required to file a federal income tax return. For 2024, the standard deduction is $14,600 for a single person and $29,200 for a married couple filing jointly. If your SSDI was less than these amounts and you had no other income, you do not have to file.

However, you may still want to file if you are due a refund — for example, if you had taxes withheld from your SSDI payments or if you are may have access to to the Earned Income Tax Credit (EITC) or Child Tax Credit. Filing a return is the only way to claim these credits and get the money back.

Even if you are not required to file, you should keep your Form SSA-1099-SM for your records. Social Security sends a copy to the IRS, so the IRS knows you received the income. Having documentation protects you if the IRS ever asks questions about your return.

Tax withholding and estimated payments

When you first start receiving SSDI, Social Security does not automatically withhold federal income tax from your payments. You have to request it. To set up withholding, you complete Form W-4V and send it to Social Security. You can choose to have 10, 12, 22, or 24 percent of your monthly benefit withheld.

If you do not request withholding and you expect to owe tax on your SSDI (because of other income), you may need to make quarterly estimated tax payments to the IRS using Form 1040-ES. Estimated payments are due on April 15, June 15, September 15, and January 15. If you do not pay enough tax throughout the year, you may owe a penalty when you file your return.

Many people find it simpler to request withholding from Social Security rather than manage quarterly payments. You can change your withholding election at any time by submitting a new Form W-4V.

State income tax and SSDI

Thirty-seven states do not tax SSDI income at all, regardless of how much you earn. These states treat SSDI the same way the federal government treats it for people with low combined income — as nontaxable. 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.

Thirteen states do tax SSDI under certain conditions. Some follow the federal thresholds and taxability rules exactly. Others have their own thresholds or tax SSDI differently depending on your age or filing status. A few states tax SSDI only if your income exceeds a very high threshold. You need to check your specific state's rules, because they do not always match federal rules.

Your state tax form instructions or your state revenue department website will tell you whether SSDI is taxable in your state and how to report it. If you live in a state that taxes SSDI and you owe state tax on it, you will report the amount on your state income tax return in addition to your federal return.

What to do if you made a mistake on a prior year return

If you filed a return in a previous year and did not report SSDI that you should have reported, or reported it incorrectly, you can file an amended return using Form 1040-X. You have three years from the original due date of the return to file an amendment and claim a refund, or seven years if you are correcting an error that resulted in you underpaying tax.

If you owe additional tax because of the correction, you may also owe interest and penalties. However, if you are due a refund, filing the amended return gets you that money back. The IRS processes amended returns more slowly than original returns — typically four to six months — so do not expect an when ready refund.

If you are unsure whether you filed correctly, a tax professional or your local IRS office can review your situation. Many communities have free tax preparation services through the IRS Volunteer Income Tax information (VITA) program, which serves people with low to moderate income.

Frequently Asked Questions

Do I have to report SSDI on my tax return if I did not owe any tax on it?

Yes. You report the full amount from your Form SSA-1099-SM on line 5b of Form 1040, even if the taxable portion is zero. The IRS uses this information to verify that you reported all your income correctly. Failing to report it, even when none is taxable, can trigger an audit notice.

What happens if Social Security sends me a corrected SSA-1099-SM after I already filed?

If the corrected form shows a different amount than what you reported, you should file an amended return (Form 1040-X) to match the corrected amount. Do this even if the difference is small, because the IRS will have the corrected information and may question your original return if the numbers do not match.

Can I deduct medical expenses related to my disability from my taxes?

Yes, if your medical expenses exceed 7.5 percent of your adjusted gross income, you can deduct the amount above that threshold on Schedule A (itemized deductions). This applies to any disability-related medical costs — doctor visits, medications, equipment, therapy — not just those paid by SSDI. You must itemize deductions rather than take the standard deduction to claim this.

If I am married and my spouse works, how does that affect whether my SSDI is taxable?

Your spouse's income counts toward your combined income for the purpose of determining whether your SSDI is taxable. If you file jointly, you use the married filing jointly thresholds ($32,000 and $44,000). If you file separately, the thresholds are lower and the rules are more complex — a tax professional can help you decide which filing status saves you more money.