Social Security Disability (SSD) is a benefit provided by the Social Security Administration to qualifying recipients. To qualify for SSD, you must meet the government’s definition of disabled and you must have worked long enough to qualify for the program. Most people who file for SSD are denied. A Social Security Disability lawyer can help you through the original application process and they can also help you appeal the denial.
If you’re approved for SSD, your overall financial life is affected. Your taxes will also be affected. One of the most common questions that Harris Graves receives from our disability clients is whether SSD is taxable income. Since it’s asked so often, we’ve decided to put together this page as a resource to help you.
Social Security Disability Is Technically Taxable Income
From the broad level, Social Security disability is considered taxable income. However, most recipients don’t meet the qualification of income that would require them to file taxes. Only about 1/3 of recipients end up needing to file taxes and report the SSD because their spouse has an income or there’s other taxable income for the household that must be reported.
SSD and Federal Taxes
First, you must consider how you file your taxes. If you’re married and you and your spouse file a joint federal return, the household must have more than $32,000 per year, half of which must be your SSD, in order for you to be required to report your benefits as income. If you’re single and you receive more than $25,000 per year, half of which is your SSD benefits, then your benefits must be reported as income.
Yet, you won’t necessarily need to report all of your benefits. The portion that you must report depends on the amount of income in your household. Determining the exact portion that can be taxed can get complicated. It’s important to talk with a Social Security Disability lawyer to learn more. For single filers, you could have to report around 50% of your SSD as taxable income if you make between $2,084 and $2,833. If you make more than that, you could be required to report up to 85%. For married couples who file jointly, if the household income is between $2,667 and $3,666, you could be required to report 50% of your SSD as taxable income. If your family income is more than that, you could be required to report up to 85%.
Back pay of social security disability can also affect your taxes. So, make sure that you talk with a Social Security Disability lawyer to find a tax strategy that may help lower the amount that you lose to taxes.
What about State Taxes?
Most states do not tax SSD income. However, there are 13 states that do. If you live in one of the following states, make sure that you talk with a Social Security Disability lawyer to determine a strategy that will benefit you and your particular situation:
- New Mexico
- North Dakota
- Rhode Island
- West Virginia
Harris Graves: Experienced Social Security Disability Lawyers
If you need to file for SSD, schedule a free consultation with Harris Graves. As experienced Social Security Disability lawyers, we understand the laws, the application process, the appeals process, and associated tax laws. We’re here to help.