Most people receiving SSDI do not owe federal income tax on their benefits

Whether you pay federal income tax on your disability check depends on your total income for the year, not on the disability check itself. The Social Security Administration does not withhold income tax from SSDI payments automatically. However, if your combined income — including wages, interest, pensions, and part of your Social Security or SSDI — crosses a certain threshold, some of your benefits become taxable.

The threshold is low. For a single filer in 2024, if your combined income exceeds $25,000, you may owe tax on up to 50 percent of your benefits. For married couples filing jointly, the threshold is $32,000. Combined income includes your adjusted gross income plus nontaxable interest plus half of your Social Security or SSDI benefits. Most people on SSDI alone stay below these thresholds and owe nothing.

If you do owe tax on your benefits, you can arrange to have it withheld from your monthly check, or you can pay it when you file your return. The Social Security Administration sends Form SSA-1099 in January each year, which shows how much you received and how much is taxable.

Key Takeaways

  • SSDI payments are not automatically taxable, but they become taxable if your total income for the year exceeds $25,000 (single) or $32,000 (married filing jointly).
  • Combined income includes your SSDI, wages, interest, pensions, and half of your Social Security or SSDI benefits — not just earnings from work.
  • If some of your benefits are taxable, you can request that Social Security withhold federal income tax from your monthly payment to avoid a bill at tax time.
  • You will receive Form SSA-1099 in January showing the total you received and the taxable portion, which you use to file your federal return.
  • State income tax rules vary; some states do not tax SSDI at all, while others follow federal rules or have different thresholds.

How Social Security calculates whether your benefits are taxable

Social Security uses a formula called "combined income" to determine the taxable portion of your benefits. Combined income is your adjusted gross income (wages, self-employment income, taxable interest, taxable dividends, and other income) plus any nontaxable interest (such as interest from municipal bonds) plus half of your Social Security or SSDI benefits.

If your combined income is below the threshold for your filing status, none of your benefits are taxable. If it exceeds the threshold, you may owe tax on up to 50 percent of your benefits, or in some cases up to 85 percent. The exact amount depends on how far above the threshold you are.

Example: You are single and receive $1,200 per month in SSDI ($14,400 per year). You also earn $15,000 from part-time work. Your combined income is $15,000 + $7,200 (half your SSDI) = $22,200. This is below the $25,000 threshold, so you owe no federal income tax on your benefits. If you earned $20,000 instead, your combined income would be $27,200, and some of your benefits would be taxable.

Requesting tax withholding from your SSDI payment

If you know your benefits will be taxable, you can ask Social Security to withhold federal income tax from your monthly check. This prevents you from owing a large amount when you file your return in April. You request withholding by completing Form W-4V (Voluntary Withholding Request) and submitting it to Social Security.

You can file Form W-4V online through your my Social Security account, by mail, or in person at your local Social Security office. You specify the amount you want withheld — either 7 percent, 10 percent, 15 percent, or 25 percent of your monthly benefit. Social Security will begin withholding the following month.

If you change your mind or want to adjust the withholding amount, you can submit a new Form W-4V at any time. There is no penalty for changing your withholding election, and you can stop withholding whenever you choose.

State income tax on SSDI benefits

Thirteen states do not tax SSDI benefits at all: Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Mississippi, Missouri, Oklahoma, and Pennsylvania. If you live in one of these states, you owe no state income tax on your disability check, regardless of your total income.

Other states follow federal rules and tax SSDI the same way the IRS does — meaning your benefits are taxable only if your combined income exceeds the state's threshold. Some states have different thresholds than the federal government, and a few states tax SSDI more heavily than the federal government does.

Check your state's tax agency website or contact them directly to learn the rules for your state. If you moved to a new state during the year, you may owe tax to both your old state and your new state, depending on when you moved and each state's rules.

What to do when you receive Form SSA-1099

In January, Social Security mails Form SSA-1099 to every person who received benefits during the previous year. This form shows the total amount of SSDI you received and the taxable portion. You use this form to file your federal income tax return.

If you did not receive Form SSA-1099 by early February, contact Social Security at 1-800-772-1213 or log into your my Social Security account to request a replacement. You need this form to file your return accurately, even if you believe your benefits are not taxable.

Report the information from Form SSA-1099 on your federal tax return. If you use tax software or work with a tax preparer, they will ask you for this form. If you owe tax on your benefits, you can pay it with your return or arrange a payment plan with the IRS if you cannot pay in full.

Working while receiving SSDI and tax implications

If you work and receive SSDI, your wages count toward your combined income, which may push your benefits into the taxable range. However, SSDI has a separate rule called Substantial Gainful Activity (SGA) that limits how much you can earn without risking your benefits themselves — this is different from the tax rule.

In 2024, if you earn more than $1,550 per month (or $2,590 if you are blind), Social Security may determine that you are working at a substantial level and review whether you still may have access to for benefits. This is a separate issue from whether your benefits are taxable for income tax purposes. You can owe income tax on your benefits and still be within the SGA limit, or vice versa.

Keep records of your earnings throughout the year so you can calculate your combined income accurately and know whether to request tax withholding. If you are unsure whether your work income will affect your SSDI, contact Social Security before taking a job or increasing your hours.

Filing your tax return when you receive SSDI

You must file a federal income tax return if your gross income exceeds the standard deduction for your filing status, even if all your income is from SSDI. In 2024, the standard deduction is $14,600 for a single filer and $29,200 for married couples filing jointly. If your only income is SSDI and it is below these amounts, you do not have to file — but you may want to if you are due a refund.

If you have other income (wages, interest, pensions) in addition to SSDI, add it all together to determine whether you must file. If you are required to file or choose to file, report your SSDI on the appropriate line of your return using the information from Form SSA-1099.

Many people who receive SSDI and have little or no other income do not owe tax and do not have to file. However, if you had taxes withheld from your SSDI check during the year, you should file a return to claim a refund of that withholding.

Frequently Asked Questions

Can I reduce my taxable SSDI by claiming dependents or deductions?

No. The formula for determining whether SSDI is taxable does not use dependents or itemized deductions. It uses only combined income (your income plus half your benefits). However, dependents and deductions do reduce your overall taxable income, which may lower the amount of tax you owe on your benefits or other income.

What if I did not request withholding and now owe taxes?

You can still pay the tax when you file your return. If you cannot pay in full, the IRS allows payment plans. You can also request withholding for the current year going forward by submitting Form W-4V to Social Security, which will reduce what you owe next year.

Does my spouse's income count toward the combined income threshold?

No. The threshold is based on your individual combined income, not your spouse's. However, if you file a joint tax return, you use the married filing jointly threshold ($32,000) to determine whether your benefits are taxable. Your spouse's income is reported separately on the return.

If I move to a state that does not tax SSDI, do I get a refund of state taxes I already paid?

You may be able to claim a credit or refund on your new state's return, depending on when you moved and each state's rules. Contact your old state's tax agency to see if you can file an amended return for a refund of taxes paid after you moved.