Are Social Security Disability Benefits Taxable?
Harrison Tax Resolution  - Tax Settlements, Audit Defense, Tax Debt Relief, Tax Resolution
RSS Follow Become a Fan

Delivered by FeedBurner

Recent Posts

Why You Need a Tax Professional
Offer in Compromise Quick Summary Fresh Start
Offer In Compromise - Joint & Separate Tax Liabilites
Your IRS Transcripts - What IRS Has On You


Appeal Rights
Enrolled Agent
Enrolled Agent vs Tax Attorney
Fees for Tax Consultations by Telephone
Fees for Tax Return Preparation
Filing Late
Foreign Income and Accounts
Former IRS Revenue Agent Assistance
Free Tax Guides - Tax Publications
Free Tax Return Preparation
IRS Notices
Limited Liability Companies (LLC)
Limited Liability Companies (LLC's)
Offer In Compromise
Recordkeeping for Personal and Tax Purposes
Tax Debt Relief
tax deductions
Tax Preparers
Tax Relief for Married or Divorced Couples
Tax Resolution
Tax Scams
Taxes on Social Security Part I
The IRS ITIN Program
The ITIN and Form W-7
Your IRS Transcripts
powered by

My Blog

Are Social Security Disability Benefits Taxable?

SSI VS SSDI Benefits


If I am awarded Social Security disability benefits, will I have to pay taxes on the money I get? What about on the backpay I should receive for the monthly benefits I miss while my application is being processed?

I researched the internet and believe this is the best answer I could find.  Lengthy yes. 

Answer: A  third of disability recipients who do pay taxes on benefits receive SSDI benefits, not SSI. SSI recipients rarely have to pay taxes, because if they had enough income to be taxed, they wouldn't qualify for SSI.) 

If you or your spouse have another source of substantial income, it's likely your SSDI benefits could be taxed by the federal government. Here's how it works. If you file your taxes as an individual, and your income is more than $25,000 per year but less than $34,000, you would have to pay taxes on about half the value of your benefits. If you are married and you file jointly, you can have a combined income of up to $32,000 before having to pay taxes on half your benefits.If you are single and you make more than $34,000 (or married and make more than $44,000), 85% of your benefits could be taxed. 

If your disability benefits are subject to taxation because your income is above these limits, your disability benefits would be taxed at your marginal tax rate. In other words, you would not pay taxes of 50% or 85% of your benefits, you would probably pay taxes of about 10-15% on 50%-85% of your benefits. Higher income people might pay taxes of 33-35% on 85% of their benefits. As to state taxes, most states don't tax disability benefits at all, but a few states tax them in the same way as the federal government, and still other states have their own way of applying state taxes to disability benefits.

If you receive a lump-sum payment,  you may have to pay taxes on this amount all in one year, and your tax rate might be higher than usual because of receiving the lump sum. But if part of your backpay was for monthly benefits from an earlier tax year, you may be able to apply the income to an earlier year, if it would lower your tax bill.    

Please note the information provided merely conveys general information related to commonly asked legal questions. 

1 Comment to Are Social Security Disability Benefits Taxable?:

Comments RSS
assignment writing company on Tuesday, July 11, 2017 10:30 PM
Greetings! Thanks for inviting me right here. i found such plenty of exciting thoughts here. Your writing style will be very smooth and that i truly enjoy to studying your posts. you have got published article with perfectly! I honestly think this internet site desires a good buy greater interest. I’ll in all likelihood be another time to study masses extra, thanks for percentage that info
Reply to comment

Add a Comment

Your Name:
Email Address: (Required)
Make your text bigger, bold, italic and more with HTML tags. We'll show you how.
Post Comment