The basic rule: SSDI is taxable income, but only if your total income crosses a threshold

Social Security Disability Insurance (SSDI) payments count as income on your federal tax return. However, you only pay tax on them if your combined income exceeds a certain amount. Combined income means your SSDI payments plus any wages, interest, dividends, or other income you received that year.

The threshold depends on your filing status. For a single filer, the threshold is $25,000. For married filing jointly, it is $32,000. If your combined income stays below these numbers, you owe no federal tax on your SSDI, even though you still file a return.

If your combined income exceeds the threshold, you may owe tax on up to 85 percent of your SSDI payments. The exact amount depends on how far over the threshold you go. The IRS publishes a worksheet each year to calculate this, and a tax professional can walk you through it.

Key Takeaways

  • You must report SSDI on your federal tax return even if you owe no tax on it, because the IRS uses the return to verify your income.
  • The threshold for owing tax on SSDI is $25,000 for single filers and $32,000 for married filing jointly; if you stay below it, you report SSDI but owe no tax.
  • If you have other income (wages, interest, rental income), that counts toward the threshold, so a part-time job can push you over even if SSDI alone would not.
  • The Social Security Administration sends Form SSA-1099 in January showing your SSDI payments for the prior year; you use this to fill out your tax return.
  • Some states tax SSDI differently than the federal government, so you may owe state tax even if you owe no federal tax, or vice versa.

What form shows your SSDI payments

In January of each year, the Social Security Administration mails you Form SSA-1099, which lists all the SSDI payments you received in the prior year. This form goes to you and to the IRS. You use the amount on this form when you file your tax return.

If you did not receive a paper copy, you can create a my Social Security account at ssa.gov and view your SSA-1099 online. You can also call Social Security at 1-800-772-1213 to request a replacement copy.

Keep this form with your tax records. If you file electronically, your tax software will ask you to enter the amount from Box 5 of the SSA-1099 (the total SSDI you received). If you file by paper, you attach a copy of the form to your return.

How other income affects what you owe

The threshold of $25,000 or $32,000 is not just SSDI—it is your combined income. If you work part-time, have interest from a savings account, receive rental income, or get a pension, all of that counts toward the threshold.

For example, if you are single and receive $20,000 in SSDI and earn $6,000 from a part-time job, your combined income is $26,000. You are $1,000 over the threshold, so you may owe tax on some of your SSDI. If you had received only SSDI with no wages, you would owe nothing.

This is why it matters to understand what counts as income. Supplemental Security Income (SSI) does not count toward the threshold—only SSDI does. But wages, self-employment income, interest, dividends, capital gains, and retirement distributions all count.

The calculation: how much SSDI is actually taxable

If your combined income exceeds the threshold, the IRS does not automatically tax all your SSDI. Instead, you calculate how much is taxable using a two-tier system.

The first tier applies if your combined income is between the threshold and the threshold plus $9,000 (or $12,000 for married filing jointly). In this range, up to 50 percent of your SSDI may be taxable.

The second tier applies if your combined income exceeds the upper limit. In this range, up to 85 percent of your SSDI may be taxable. The exact percentage depends on how much you are over the limit.

The IRS publishes a worksheet in the instructions to Form 1040 each year that walks through this calculation step by step. A tax preparer or tax software can also do this for you. The math is not straightforward enough to do by hand reliably, so most people use one of these options.

Filing your return when you receive SSDI

You must file a federal tax return if your gross income (including SSDI) meets the filing threshold for your age and status. For 2024, a single person under 65 must file if gross income is $14,600 or more. The threshold is higher if you are 65 or older.

Even if your income is below the filing threshold, you should file a return if you had federal income tax withheld from wages or other sources. Filing lets you claim a refund of that money.

When you file, you report your SSDI on Form 1040, line 5b. Your tax software will guide you through this. If you file by paper, the instructions to Form 1040 show where to enter the amount from your SSA-1099.

You do not need to attach the SSA-1099 itself to your return, but keep it with your records in case the IRS asks questions later.

State taxes and SSDI

Thirteen states tax SSDI: Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, Vermont, and West Virginia. The rules vary by state—some tax it the same way the federal government does, while others use different thresholds or percentages.

If you live in one of these states, you will need to file a state tax return and report your SSDI there as well. Your state's tax agency publishes instructions on how to calculate state tax on SSDI. A tax preparer familiar with your state's rules can handle this for you.

If you live in a state that does not tax SSDI, you still file a federal return if required, but you do not owe state tax on the SSDI portion of your income.

What happens if you do not report SSDI on your return

The IRS receives a copy of your SSA-1099, so they know what you received. If you file a return without reporting the SSDI, the IRS will notice the discrepancy and may send you a notice asking for an explanation or demanding payment.

If you owe tax and do not pay it, the IRS can assess penalties and interest. The penalty for not filing is usually 5 percent of the unpaid tax per month, up to 25 percent. Interest accrues daily on any unpaid balance.

If you made a mistake on a prior return, you can file an amended return (Form 1040-X) to correct it. The sooner you do this, the less interest will accrue.

Frequently Asked Questions

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

It depends on the amount. For 2024, a single person under 65 must file if gross income is $14,600 or more. If your SSDI is below that, you are not required to file. However, if you had taxes withheld from any source, filing a return lets you claim a refund, so it may be worth doing anyway.

What if I work part-time and receive SSDI—do I report both on the same return?

Yes. You report your wages on Form 1040 and your SSDI on the same return. Both count toward your combined income, which determines whether you owe tax on the SSDI. Your employer will send you a W-2 for wages, and Social Security will send you the SSA-1099 for SSDI.

Can I reduce my SSDI tax by earning less money?

Yes, if you are close to the threshold. If your combined income is just over the limit, reducing other income (such as by working fewer hours) can bring you back below the threshold and eliminate the tax on your SSDI. However, this only makes sense if the tax you would owe is more than the income you would give up.

Does SSI count toward the SSDI tax threshold?

No. Supplemental Security Income (SSI) is a separate program and does not count as income for purposes of calculating SSDI tax. Only SSDI payments, wages, and other earned or unearned income count toward the threshold.

What if I disagree with the amount on my SSA-1099?

Contact Social Security directly at 1-800-772-1213 or visit your local Social Security office. Bring your payment records or bank statements showing what you received. Social Security can issue a corrected SSA-1099 if there is an error. Do not file your tax return until the discrepancy is resolved.