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Learn whether Social Security disability income is taxable.

Is Social Security Disability Income Taxable?

Law Offices of Jeff Martin Sept. 26, 2023

Social Security Disability Insurance (SSDI) provides crucial financial assistance to individuals who cannot work due to a disability. It plays an invaluable role in providing support to those in need.

However, when it comes to taxes, many individuals receiving SSDI benefits are left wondering if their disability income is taxable. In this blog, we will delve into the tax implications of SSDI, providing a clear understanding of how it may affect your overall tax situation.

What Is Social Security Disability Insurance?

Social Security Disability Insurance is a federal program managed by the Social Security Administration (SSA). Its main purpose is to offer financial help to individuals unable to work due to a qualifying disability.

To be eligible for SSDI, claimants must meet certain work history and medical condition criteria. Furthermore, their medical condition must hinder their ability to earn a substantial income through employment. Once approved for SSDI, individuals receive monthly payments to help cover their living expenses while they cannot work.

When Is SSDI Taxable?

While SSDI payments are intended to assist disabled individuals, their tax implications can vary depending on certain factors. In general, if SSDI benefits are the recipient's only source of income, they are not subject to federal income tax. However, if an SSDI recipient has additional sources of income, such as earnings from part-time work, a portion of their benefits may become taxable.

Single individuals earning more than $25,000 per year may be obliged to report up to 50% of their SSDI benefits as taxable income. For married individuals filing joint tax returns, when their combined annual income with their spouse surpasses $32,000, 85% of their SSDI benefits will be categorized as taxable income.

Do All States Tax Social Security Disability Income?

While federal tax laws regulate SSDI benefits, state tax policies may differ. As of 2020, disability benefits are still subject to income tax in the following states:

  • Colorado

  • Connecticut

  • Kansas

  • Minnesota

  • Missouri

  • Montana

  • Nebraska

  • New Mexico

  • North Dakota

  • Rhode Island

  • Utah

  • Vermont

  • West Virginia

Call an SSDI Attorney!

Contact the Law Offices of Jeff Martin's Social Security Disability attorneys in Tulsa, Oklahoma, for comprehensive guidance and information regarding the taxation of Social Security Disability Income. We’re here to provide you with a deeper understanding of the question, "Is Social Security Disability Income taxable?" and to assist you in navigating other related concerns. Visit our law firm in Tulsa, Oklahoma!