Whether your SSDI is taxed depends on your total income, not on SSDI alone

Social Security Disability Insurance (SSDI) payments may or may not be taxed in 2025. The IRS does not automatically tax SSDI the way it taxes wages. Instead, the IRS uses a formula that combines your SSDI with other income you receive — such as wages, interest, pensions, or self-employment income. If your combined income falls below a certain threshold, you owe no federal tax on SSDI. If it exceeds that threshold, a portion of your SSDI becomes taxable.

The threshold amounts are set by federal law and do not change year to year. For 2025, those thresholds remain the same as they have been since 1984. This means if you were not taxed on SSDI in 2024, you likely will not be taxed in 2025 unless your other income changed.

Key Takeaways

  • SSDI is taxed only if your combined income (SSDI plus other income) exceeds $25,000 for a single filer or $32,000 for a married couple filing jointly in 2025.
  • The IRS uses a two-tier formula: if you are below the first threshold, no SSDI is taxed; if you are above it, up to 50 percent or 85 percent of your SSDI may be taxed depending on how far above the threshold you are.
  • You must file a tax return and report your SSDI to the IRS even if you owe no tax, because the IRS needs to verify your income against the thresholds.
  • State taxes on SSDI vary: some states tax SSDI the same way the federal government does, some do not tax it at all, and some have their own rules.
  • The Social Security Administration sends Form SSA-1099 in January each year showing how much SSDI you received; you use this form to complete your tax return.

The two-tier formula that determines how much SSDI is taxable

The IRS calculates taxable SSDI using what is called combined income. This is your Adjusted Gross Income (AGI) plus nontaxable interest plus half of your SSDI benefits. Once you know your combined income, you compare it to two thresholds.

The first threshold is $25,000 for a single filer, $32,000 for a married couple filing jointly, and $0 for a married person filing separately. If your combined income is at or below this threshold, none of your SSDI is taxed. If your combined income exceeds this threshold, you move to the second calculation.

The second threshold is $34,000 for a single filer and $44,000 for a married couple filing jointly. The amount of SSDI that becomes taxable depends on which threshold you cross. Between the first and second threshold, up to 50 percent of your SSDI may be taxed. Above the second threshold, up to 85 percent of your SSDI may be taxed. The IRS publishes a worksheet each year to walk you through the exact calculation.

What counts as income for the combined income calculation

Combined income includes more than just wages. It includes wages from a job, self-employment income, interest from savings accounts and bonds, dividends from stocks, rental income, pension payments, and distributions from retirement accounts. It also includes income from a spouse if you file jointly.

Some forms of income do not count toward combined income. These include Supplemental Security Income (SSI), which is a separate program from SSDI; certain railroad retirement benefits; workers' compensation; and some veterans' benefits. If you receive any of these, they do not push you over the SSDI tax threshold.

If you are married and file a joint return, your spouse's income counts toward the threshold even if your spouse does not receive SSDI. This is one reason why married couples sometimes owe tax on SSDI when a single person with the same SSDI amount would not.

How to report SSDI on your tax return

In January of each year, the Social Security Administration mails you Form SSA-1099, which shows the total SSDI you received in the previous year. You use this form to complete your federal tax return. The amount on the SSA-1099 goes on your Form 1040 or other IRS tax form.

You must report your SSDI even if you believe none of it is taxable. The IRS needs to see the full amount so it can verify that your combined income does not exceed the thresholds. If you do not report it, the IRS may send you a notice asking why.

If you file electronically, most tax software will walk you through the combined income calculation and tell you whether any SSDI is taxable. If you file by paper or work with a tax preparer, bring the SSA-1099 and documentation of any other income you received during the year.

State taxes on SSDI in 2025

Thirteen states tax SSDI using the same federal formula: Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, Vermont, and West Virginia. If you live in one of these states and owe federal tax on SSDI, you likely owe state tax as well.

Thirty-seven states do not tax SSDI at all, regardless of your income. If you live in one of these states, you owe no state income tax on SSDI even if you owe federal tax.

If you live in a state that taxes SSDI, check your state's tax agency website or contact them directly to confirm the thresholds and rules for your state, as some states use slightly different calculations than the federal government.

What happens if you owe tax on SSDI

If the IRS determines that some of your SSDI is taxable, you owe federal income tax on that amount just as you would on any other income. You can pay the tax when you file your return, or you can arrange to have the Social Security Administration withhold taxes from your SSDI payments each month.

To request withholding, you complete Form W-4V and send it to your local Social Security office or mail it to the address on the form. You can choose to have 7 percent, 10 percent, 12 percent, or 22 percent of your SSDI withheld. Many people choose withholding to avoid a large tax bill when they file.

If you do not withhold and you owe a large amount, you may be required to make quarterly estimated tax payments to the IRS. The IRS will notify you if this applies to you.

Changes in income that affect SSDI taxation

If your other income changes during the year — for example, you start or stop working, receive a pension, or have a change in interest income — your SSDI tax situation may change. You do not need to notify Social Security of income changes for tax purposes, but you should keep track of your income so you can report it accurately on your tax return.

If you expect to owe tax on SSDI for the first time, you may want to adjust your withholding early in the year rather than waiting until tax time. You can change your Form W-4V at any time by submitting a new form to Social Security.

Frequently Asked Questions

Do I have to file a tax return if I only receive SSDI?

You must file a return if your combined income exceeds the threshold for your filing status. Even if you do not owe tax, the IRS recommends filing to verify your income. If you file, you may be due a refund of taxes withheld from your SSDI payments.

What if I work part-time and receive SSDI?

Your wages count as income in the combined income calculation. If your wages plus SSDI plus any other income exceeds the first threshold, part of your SSDI becomes taxable. You may also be subject to SSDI work incentives that allow you to earn a certain amount before your benefits are affected.

Can I reduce my SSDI tax by filing separately from my spouse?

No. If you are married and file separately, the threshold for SSDI taxation is $0, meaning any SSDI you receive is potentially taxable. Filing jointly usually results in a lower tax burden if one spouse receives SSDI.

What if I did not receive an SSA-1099?

Contact the Social Security Administration at 1-800-772-1213 or visit your local Social Security office. You can also create an account at ssa.gov to view your SSA-1099 online. You need this form to file your tax return accurately.

Does SSDI taxation affect my Medicare premiums?

No. SSDI taxation and Medicare premium calculations are separate. Your Medicare premiums are based on your modified adjusted gross income from two years prior, not on whether your SSDI is taxed.