Social Security Disability Taxes
Social Security Disability Taxes
If you have SSDI tax questions, you should be aware that additional income that places you over a certain monetary threshold may make your Social Security disability benefits taxable. However, most people who wonder is Social Security Disability taxable, don’t have to pay taxes on their benefits. This is because the majority of people who qualify for the program meet strict criteria and have little to no other income.
How Does Social Security Disability Operate?
The Social Security program was created as a part of President Franklin Roosevelt’s New Deal government reforms in the 1930s. The New Deal was put in place to restore the economy and lift the United States out of the Great Depression. Social Security was a way to provide an income for the elderly and Americans with disabilities who were unable to work.
Most Social Security recipients are retired persons. They are at least 62 years of age and have filed to have monthly benefits paid to them based on the money they paid into the program while they were working.
Disability recipients, on the other hand, don’t have to meet age restrictions to receive benefits. They do, however, have to have paid into the Social Security program during their working years. They must also meet strict criteria put in place by the Social Security Administration (SSA).
The SSA requires that you be limited in your ability to do basic work including remembering, sitting, walking, standing, and lifting for a year or more. You must no longer be able to complete your previous job due to your condition, and it must prevent you from performing any other job based on your skills, experience, education, and age.
Also, you must either be unemployed or working only enough that your income is under $1,220 a month (in 2019). The SSA has an approved list of disabilities. If your condition is not on it, it must be approved as equally severe to a condition that is on the list.
Are SSDI Payments Taxable?
Answering the question, “do I have to pay taxes on my SSDI benefits” depends on your total income. If you add one-half of your disability benefits to any additional income and still come in below the IRS’s single threshold of $25,000 or married threshold of $32,000, then you won’t owe taxes on your benefits. So, if you’re wondering, “how much of my SSDI benefits are taxable,” the answer is none, as long as it falls below these amounts. You’ll only be taxed for any amount that goes over IRS thresholds.
Do I Have to Pay State Taxes on SSDI/SSI?
You’ll find that most states will not tax Social Security benefits, including disability benefits. California is one of these states. The only states to tax benefits as of 2018 are West Virginia, Utah, Vermont, North Dakota, Rhode Island, Nebraska, New Mexico, Missouri, Montana, Kansas, Minnesota, Colorado, and Connecticut. These states tax on a threshold basis similar to that of the IRS.
If you have questions about Social Security Disability or your taxable status, Jorgensen Law can help. Our skilled attorneys have won thousands of disability cases and have the experience necessary to answer your questions. Call us today at 1-888-855-2948 to set up a free initial consultation.