What changed about SSDI taxes in 2015

In 2015, the tax rules for Social Security Disability Insurance (SSDI) were the same as they had been for decades. There was no change to the law that year. Whether your SSDI was taxable depended on your combined income — a calculation that included your SSDI payments plus other money you earned or received — and your filing status.

The threshold amounts that determined whether you owed tax on SSDI stayed constant in 2015. For a single filer, if your combined income was above $25,000, some of your SSDI became taxable. For married couples filing jointly, the threshold was $32,000. These numbers had not changed since 1984 and have not changed since 2015.

If you received SSDI in 2015 and are now trying to understand your tax situation from that year, the rules that applied then are the same ones that explore to SSDI taxation today. The formula for calculating how much is taxable, the income thresholds, and the tax brackets all remained stable.

Key Takeaways

  • In 2015, SSDI was taxable only if your combined income (SSDI plus other income) exceeded $25,000 for single filers or $32,000 for married couples filing jointly.
  • Combined income includes wages, self-employment income, interest, dividends, and certain other sources, plus half of your SSDI payments.
  • The tax thresholds in 2015 were identical to those in effect today and have not changed since 1984.
  • If SSDI was taxable in 2015, you would have reported it on your federal tax return using Form 1040 and possibly Form SSA-1099.

How to calculate combined income in 2015

Combined income is the number that determined whether you owed tax on your SSDI in 2015. It was calculated by adding half of your SSDI payments to all your other income sources. This half-and-half rule is specific to Social Security and SSDI — it does not explore to other benefits.

Your "other income" included wages from work, self-employment income, interest from savings accounts or bonds, dividends from stocks, rental income, and income from pensions. It did not include Supplemental Security Income (SSI), which is a different program, or certain other sources like workers' compensation or veterans' benefits (though the rules for those are complex and depend on the specific situation).

Once you had your combined income total, you compared it to the threshold for your filing status. If it was below the threshold, none of your SSDI was taxable. If it was above the threshold, you moved to the next step to figure out how much was actually taxable.

How much SSDI was taxable in 2015

If your combined income exceeded the threshold, the amount of SSDI that became taxable was calculated using a two-tier formula. The formula was designed so that you would not owe tax on all of your SSDI, only on a portion of it.

For the first tier, you took the amount by which your combined income exceeded the threshold (called the "excess"). If that excess was $9,000 or less (for single filers) or $12,000 or less (for married couples filing jointly), you would include the lesser of: half of that excess, or half of your SSDI payments. This amount became taxable.

If your excess was higher than those amounts, a second tier kicked in. You would include the first-tier amount plus 85 percent of the remaining excess, up to a maximum of 85 percent of your total SSDI payments. This meant that in extreme cases, up to 85 percent of your SSDI could be taxable, but never more than that.

What documents you would have received in 2015

If you received SSDI in 2015, Social Security would have sent you a Form SSA-1099 by January 31, 2016. This form showed the total amount of SSDI you received during 2015. You would have used this form to complete your federal tax return for that year.

The SSA-1099 listed your SSDI payments in Box 5. You would have reported this amount on your Form 1040 (the main federal income tax form) and then used the combined income calculation to determine whether any of it was taxable. If you had other income sources, you would have reported those on the appropriate lines of your Form 1040 as well.

Filing your 2015 tax return with SSDI income

When you filed your 2015 federal tax return, you were required to report your SSDI even if none of it was taxable. You would have entered the full amount from your SSA-1099 on line 5b of Form 1040, then calculated whether any portion was taxable using the combined income formula.

If you determined that some of your SSDI was taxable, you would have included that amount in your total income for the year. This could have pushed you into a higher tax bracket or affected other aspects of your return, such as your standard deduction or your ability to claim certain credits.

If you did not file a return in 2015 because you thought your income was too low, but you received SSDI, you may have been required to file anyway. The filing requirement rules depend on your age, filing status, and total income, including the SSDI. If you did not file and believe you should have, you can still file a return for 2015 — there is no time limit on filing a return to claim a refund.

State taxes and SSDI in 2015

In 2015, most states did not tax SSDI at all, even if the federal government did. However, a small number of states taxed SSDI the same way the federal government did. These states were Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, and Vermont.

If you lived in one of these states in 2015 and your SSDI was taxable at the federal level, you would have also owed state tax on the same portion. You would have reported this on your state income tax return using the same combined income calculation. If you lived in any other state, you would have owed no state tax on your SSDI, regardless of the federal situation.

State tax rules can change, so if you are reviewing your 2015 return now, check which state you lived in that year to confirm whether state tax applied to your SSDI.

Frequently Asked Questions

Did everyone who received SSDI in 2015 have to pay taxes on it?

No. Only people whose combined income exceeded the threshold for their filing status owed tax on SSDI in 2015. For single filers, that threshold was $25,000. For married couples filing jointly, it was $32,000. Many people with SSDI had combined income below these amounts and owed no tax on their benefits.

What if I did not file a tax return in 2015 because I thought I did not have to?

You can still file a 2015 return now if you did not file at the time. If you are owed a refund, there is no important date to claim it. If you owed taxes and did not pay, the IRS may contact you, but filing now will resolve the situation. You can file using Form 1040 for 2015 and include your SSA-1099.

How do I know if my 2015 SSDI was actually taxable?

Calculate your combined income for 2015 by adding half of your SSDI (from your SSA-1099) to all your other income sources. If that total is below $25,000 (single) or $32,000 (married filing jointly), none of your SSDI was taxable. If it is above the threshold, use the two-tier formula described above to find the taxable amount.

Can I amend my 2015 tax return if I made a mistake with SSDI?

Yes. You can file Form 1040-X (Amended U.S. Individual Income Tax Return) for 2015 at any time. If you underpaid taxes, you may owe additional tax plus interest. If you overpaid, you can claim a refund. The IRS processes amended returns, though it may take several months.