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Are Social Security Disability Benefits Taxable?

It can take as long as five or so months to get approved for Social Security Disability benefits, and when a disabled individual finally starts receiving their much-needed benefits, they must accept that their benefit amount is significantly less than what they earned while they were working.

Since Social Security Disability benefits are at a fraction of a person’s previous pay (but still very much needed), it’s understandable why they’d be concerned about paying income taxes on their SSD benefits. “Are disability benefits taxable income?” In a word – sometimes. Some people who are on Social Security Disability have no choice but to pay taxes when they receive benefits.

Who Has to Pay Taxes on SSD Benefits?

According to the Social Security Administration, “About one-third of our current beneficiaries pay taxes on their benefits.” But who’s affected? Those who have substantial income in addition to their Social Security benefits are affected. You may have to pay taxes on your benefits if any of the following is true:

  • You file an individual federal tax return and your income exceeds $25,000 for the year.
  • You file a joint return and your combined income with your spouse exceeds $32,000.
  • You are married, but you file a separate return. In this case, you’ll probably have to pay taxes on your disability benefits.

Suppose the onlyincome you had during the year was Social Security Disability benefits. In that case, your benefit should not be taxable. However, if you generated other income throughout the year, or if your investments did well, you may have to pay taxes on part of your disability benefits. An attorney from our firm can help explain this.

If you have questions about how filing status and income subject SSD benefits to taxation, contact our firm to meet with a Dallas Social Security Disability lawyer. We’d be happy to discuss the income thresholds and answer any other questions that you have.