When You Must File a Tax Return

Whether you file taxes depends on your total income for the year, not on whether you receive SSDI alone. SSDI payments themselves are not taxable income. However, if you have other income—wages, self-employment earnings, interest, dividends, or certain other sources—you may be required to file.

The threshold changes each year. For 2024, you must file if your non-SSDI income exceeds $14,600 (if you are single and under 65). If you are 65 or older, the threshold is $18,600. These amounts increase slightly each year. If you are married filing jointly, the thresholds are higher. Check the IRS website or ask a tax preparer for the current year's threshold that applies to your situation.

Even if you are not required to file, you may want to file anyway if you had taxes withheld from other income or if you are may have access to to a refundable tax credit like the Earned Income Tax Credit (EITC). Filing can result in a refund.

Key Takeaways

  • SSDI payments are not taxable, so they do not count toward the income threshold that determines whether you must file.
  • You must file if your income from other sources (wages, self-employment, interest, dividends) exceeds the annual threshold set by the IRS, which varies by age and filing status.
  • If you earned wages or had taxes withheld from other income, file even if you are not required to, because you may receive a refund.
  • Form 1040 is the standard form; you do not need a separate form for SSDI because it is not reported as income.
  • If you cannot afford a tax preparer, the IRS Free File program and VITA (Volunteer Income Tax information) offer free tax preparation based on income limits.

What Income Counts Toward the Filing Threshold

SSDI does not count. Neither do Supplemental Security Income (SSI) payments, if you receive those. Railroad Retirement benefits also do not count. These are the three main benefit programs that are excluded from the income calculation.

Everything else counts: W-2 wages from a job, net self-employment income, interest earned on a savings account or CD, dividends from stocks or mutual funds, rental income, capital gains, and income from a side business or gig work. If you are unsure whether a specific income source counts, the IRS publication 17 (Your Federal Income Tax) lists all taxable and nontaxable income types. You can also call the IRS at 1-800-829-1040 or visit irs.gov.

Some income is nontaxable even if it counts toward the filing threshold. For example, certain scholarships, gifts, and life insurance proceeds do not count as income. However, most ordinary income sources do count.

How to Report SSDI on Your Tax Return

You do not report SSDI on your tax return at all. It does not appear on Form 1040, Schedule C, or any other IRS form. The Social Security Administration sends you a Form SSA-1099 each January showing the SSDI you received in the prior year, but this form is for your records only—you do not attach it to your tax return or send it to the IRS.

If you have other income, report that income on the appropriate form. Wages go on Form 1040 (line 1a) and are supported by your W-2 from your employer. Self-employment income goes on Schedule C and then to Form 1040. Interest and dividends go on Schedule B. Rental income goes on Schedule E. Each income type has its own form or line.

Keep your Form SSA-1099 with your tax records in case the IRS ever asks questions about your income, but do not mail it with your return.

Filing When You Have Both SSDI and Work Income

If you work and receive SSDI, you report only the work income on your tax return. SSDI remains unreported because it is not taxable. This is true even if your work income is small or part-time.

Be aware that if you work, your SSDI benefits may be reduced or suspended depending on how much you earn. This is called the Substantial Gainful Activity (SGA) limit. In 2024, the SGA limit is $1,550 per month for non-blind beneficiaries and $2,590 for blind beneficiaries. If you earn more than these amounts, Social Security may reduce or stop your benefits. However, this is a Social Security rule, not a tax rule. It does not change how you file taxes—you still report only the work income, not the SSDI.

If you are unsure whether your work will affect your benefits, contact Social Security at 1-800-772-1213 before you start working or increase your hours.

Tax Forms and important date

The standard important date to file federal income taxes is April 15 of the year following the tax year. For example, taxes for 2024 income are due April 15, 2025. If April 15 falls on a weekend or holiday, the important date moves to the next business day.

You can file by mail or electronically. Electronic filing (e-file) is faster and reduces errors. If you file by mail, send your return to the IRS address listed in the Form 1040 instructions for your state. Keep a copy for your records.

If you cannot file by April 15, you can request an extension by filing Form 4868 (process for Automatic Extension of Time to File U.S. Individual Income Tax Return). This gives you until October 15 to file. However, an extension to file is not an extension to pay. If you owe taxes, you must pay by April 15 or face penalties and interest, even if you file the extension.

Free and Low-Cost Tax Preparation Options

If your income is below a certain threshold, you may be able to use the IRS Free File program. In 2024, Free File is available to people whose income is $79,000 or less. You can access Free File through irs.gov. The program offers free tax software from approved providers, and some providers also offer free preparation by a tax professional.

VITA (Volunteer Income Tax information) is another free option. VITA sites are run by nonprofits and staffed by trained volunteers. They prepare returns for people with income below a certain level (usually around $60,000). To find a VITA site near you, visit irs.gov or call 211. Many VITA sites also offer free preparation for EITC and other credits.

If you are 60 or older, AARP Tax-Aide offers free tax preparation at thousands of locations nationwide. You do not have to be an AARP member. Visit aarp.org or call 1-888-227-7669 to find a site near you.

What Happens If You Do Not File When Required

If you are required to file and do not, the IRS may assess a failure-to-file penalty. The penalty is usually 5% of the unpaid tax for each month the return is late, up to 25%. If you owe no tax, the penalty is smaller or zero, but you may still face other consequences.

If you file late but owe tax, you also owe interest on the unpaid amount from the original due date. Interest compounds daily. The longer you wait, the more you owe.

If you realize you did not file in a prior year, file as soon as you can. The IRS is often willing to work with people who file late voluntarily. If you are owed a refund, there is no penalty for filing late, though you can only claim a refund for the past three years.

Frequently Asked Questions

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

No. SSDI is not taxable income and does not appear anywhere on your federal tax return. You receive a Form SSA-1099 showing what you received, but you keep it for your records only—you do not send it to the IRS or attach it to your return.

What if I received SSDI for only part of the year?

It does not matter. SSDI is never taxable, whether you received it for the full year or just a few months. The amount on your Form SSA-1099 is not counted toward the income threshold that determines whether you must file.

Can I claim SSDI as a dependent on someone else's return?

No. SSDI is not income, so it does not affect whether you can be claimed as a dependent. The rules for claiming a dependent depend on your relationship to the person claiming you, your age, and your total income from all sources—but SSDI does not count in that calculation.

What if I owe taxes but cannot pay by April 15?

File your return on time anyway. You can set up a payment plan with the IRS by calling 1-800-829-1040 or visiting irs.gov. You will owe interest and possibly a penalty, but a payment plan lets you pay over time instead of all at once.

Do state taxes work the same way as federal taxes?

Most states do not tax SSDI either, but a few do. Check your state's tax website or contact your state tax agency to confirm. If your state does tax SSDI, you will need to report it on your state return even though you do not report it federally.