Massachusetts does not tax SSDI benefits

If you receive Social Security Disability Insurance (SSDI) in Massachusetts, the state will not tax those benefits on your state income tax return. Massachusetts exempts SSDI from state taxation entirely, regardless of how much you receive or what other income you have.

This is separate from federal taxation. The federal government may tax your SSDI depending on your total income for the year—a calculation that includes wages, interest, pensions, and other sources. But Massachusetts itself takes no portion of your SSDI payment.

The exemption applies to the full SSDI payment you receive each month. You do not need to report it on your Massachusetts tax return, and you do not need to claim it as an exemption or deduction. It straightforward does not factor into your state tax liability.

Key Takeaways

  • Massachusetts does not tax SSDI benefits under state law, so you owe no state income tax on those payments.
  • Federal taxation of SSDI is separate and depends on your total income for the year, not on Massachusetts rules.
  • You do not report SSDI on your Massachusetts tax return—it is fully exempt from state taxation.
  • Other income you receive (wages, interest, rental income) is still taxable in Massachusetts even if you also receive SSDI.
  • If you are unsure whether your federal SSDI is taxable, contact the Social Security Administration or a tax professional; Massachusetts tax questions can go to the Department of Revenue.

How this differs from federal taxation

Massachusetts and the federal government have different rules about SSDI. While Massachusetts exempts it entirely, the federal government taxes SSDI if your combined income exceeds certain thresholds. Combined income includes your SSDI plus half of your SSDI plus any other income—wages, interest, pensions, rental income, and so on.

For 2024, if you file as single and your combined income exceeds $25,000, you may owe federal tax on up to 50 percent of your SSDI. If it exceeds $34,000, you may owe tax on up to 85 percent. These thresholds change slightly each year. Married couples filing jointly have higher thresholds: $32,000 and $44,000 respectively.

The key point: even if you owe federal tax on your SSDI, you still owe nothing to Massachusetts. The state exemption stands regardless of what the IRS determines.

Other income you receive is still taxable in Massachusetts

The SSDI exemption applies only to your SSDI payments. Any other income you have—wages from work, interest from savings, rental income, pension payments, or unemployment benefits—remains subject to Massachusetts state income tax.

If you work part-time while receiving SSDI, your wages are taxable in Massachusetts. If you have a pension or retirement account distributions, those are taxable. The exemption is specific to SSDI and does not shield your other income from state taxation.

When you file your Massachusetts return, you report all income except SSDI. The state will calculate your tax based on that total. Your SSDI straightforward does not appear in the calculation.

Supplemental Security Income (SSI) is also exempt in Massachusetts

Supplemental Security Income (SSI) is a different program from SSDI, though both are run by the Social Security Administration. SSI is a needs-based program for people with low income and limited resources; SSDI is based on work history and disability. Massachusetts also exempts SSI from state income taxation.

If you receive SSI instead of SSDI, or if you receive both programs, the SSI portion is not taxable in Massachusetts either. Like SSDI, you do not report it on your state return.

The federal government does not tax SSI at all—neither the IRS nor any state taxes it. So if you receive SSI, you have no federal or state tax liability on those payments.

What to do if you receive SSDI and file taxes in Massachusetts

When you file your Massachusetts state income tax return, you do not need to report your SSDI. You report only the other income you received during the year: wages, interest, dividends, rental income, pension distributions, and so on.

If you use tax software or work with a tax preparer, tell them you receive SSDI so they do not accidentally include it. Most tax software has a field for SSDI income, but entering it in Massachusetts will not change your state tax—it straightforward clarifies your situation.

Keep your Social Security benefit statement (Form SSA-1099) for your records. The Social Security Administration sends this each January and shows your total SSDI for the previous year. You may need it if the IRS questions your federal return, but you do not need to attach it to your Massachusetts return.

Federal taxation of SSDI is a separate question

Because you live in Massachusetts does not mean your SSDI is safe from federal taxation. The two are independent. You may owe federal tax on your SSDI even though Massachusetts taxes none of it.

To determine whether your SSDI is federally taxable, add up your combined income: your SSDI, plus half your SSDI, plus all other income. If that total exceeds the threshold for your filing status, some of your SSDI becomes taxable to the IRS.

The Social Security Administration publishes a worksheet each year to help you calculate this. You can also contact the IRS directly, or work with a tax professional who understands SSDI taxation. The key is not to assume that because Massachusetts does not tax it, the federal government does not either.

Contact information for Massachusetts and federal tax questions

If you have questions about Massachusetts state taxation of SSDI, contact the Massachusetts Department of Revenue. They can confirm the exemption and answer questions about your state return. You can reach them through their website or by phone during business hours.

For questions about federal taxation of your SSDI, contact the Social Security Administration at 1-800-772-1213 or visit ssa.gov. They can explain how your specific income situation affects federal taxation. You can also consult a tax professional or the IRS directly.

Keep records of all your income sources and your SSDI benefit statement. These documents help you and your tax preparer get the calculation right, whether you are filing with Massachusetts, the IRS, or both.

Frequently Asked Questions

Do I have to report my SSDI on my Massachusetts tax return?

No. Massachusetts exempts SSDI from state taxation, so you do not report it on your state return. Report only your other income—wages, interest, pensions, and so on. SSDI does not appear anywhere on the Massachusetts form.

If Massachusetts does not tax my SSDI, does that mean the federal government does not either?

No. Massachusetts and federal taxation are separate. The federal government may tax your SSDI if your combined income exceeds certain thresholds, even though Massachusetts taxes none of it. You may owe federal tax and zero state tax on the same SSDI payment.

What if I receive both SSDI and SSI?

Both are exempt from Massachusetts state taxation. You report neither on your state return. The federal government does not tax SSI at all, but may tax SSDI depending on your combined income, just as described above.

If I work part-time and receive SSDI, are my wages taxable in Massachusetts?

Yes. Your wages are taxable in Massachusetts. Only your SSDI is exempt. Report your wages on your state return along with any other income you have; do not report the SSDI itself.

Where do I get my SSDI benefit statement for tax purposes?

The Social Security Administration sends Form SSA-1099 each January showing your total SSDI for the previous year. You can also create a my Social Security account at ssa.gov and view your statement online anytime. Keep this for your records when you file taxes.