Understanding Tax Implications for Social Security Disability (SSDI) Recipients
Individuals receiving Social Security Disability (SSDI) benefits may wonder if they are eligible for a tax refund. The answer depends on several factors, including income level, filing status, and whether they claim certain tax credits.
Tax Filing Requirements for SSDI Recipients
Generally, if your only income is SSDI benefits, you are not required to file a tax return. This is because the income threshold for filing is $25,000 for single filers and $32,000 for joint filers. SSDI benefits are not taxable unless your combined income exceeds these thresholds.
Taxability of SSDI Benefits
If your income exceeds the filing thresholds, a portion of your SSDI benefits may be taxable. The taxable percentage depends on your income level and filing status:
- Single filers: 50% of benefits are taxable if income exceeds $25,000
- Joint filers: 50% of benefits are taxable if income exceeds $32,000
- Married filing separately: 85% of benefits are taxable if you lived with your spouse at any time during the year
Tax Credits for Disability Recipients
Even if you are not required to file a tax return, you may still be eligible for certain tax credits that can result in a refund. These credits include:
- Earned Income Tax Credit (EITC): A tax credit for low- and moderate-income working individuals, including those with disabilities.
- Disability Credit: A tax credit for individuals who are permanently and totally disabled.
- Credit for the Elderly or Disabled: A tax credit for individuals who are age 65 or older or who are permanently and totally disabled.
Filing for a Refund
To claim a tax refund, you must file a tax return, even if you are not required to do so. You can file your taxes online, by mail, or through a tax preparer.
Additional Considerations
- If you have other sources of income besides SSDI, such as wages or interest, you may need to file a tax return.
- If you are married and filing separately, the taxability of your SSDI benefits may be different.
- If you receive SSDI benefits and Supplemental Security Income (SSI), the SSI benefits are not taxable.
Whether or not you get a tax refund if you are on disability depends on your income level, filing status, and whether you claim certain tax credits. If you have any questions about your tax obligations, it is advisable to consult with a tax professional.
Additional Resources
IRS Tax Help for People With Disabilities
FAQ
Should I file taxes if I’m on disability?
Will I get a tax refund if I am on disability?
Can I get a tax refund if my only income is Social Security?
Is there a federal tax deduction for being disabled?
Can I get a tax refund on disability?
You may get a tax refund on disability in certain situations if you don’t owe, but file claiming certain tax credits. For example, you may get a credit for being disabled if you received benefits from an employer insurance or pension plan.
Do you owe taxes if you have a disability?
The federal tax code includes a number of provisions that can ease the tax burden on people living with a disability. Some disability payments and benefits are free of income tax, while deductions and credits can reduce the taxes you do owe. These tax breaks aren’t always obvious, though. You have to know where to look for them.
Can I get a tax refund if I’m on SSI?
You can get a tax refund even if you’re on SSI and don’t pay taxes, if you qualify for certain types of credits like the child tax credit or earned income tax credit. (Only a portion of the child tax credit is refundable, meaning that you could receive the credit even if you have zero income tax liability.
Do I need to file a Disability Tax Return?
Some kinds of disability income are taxable, but you generally don’t need to file a return unless your taxable income was more than the 2023 standard deduction — $13,850 for single filers and $27,700 for married couples. But you may still want to file if you qualify for refundable credits like the earned income credit.