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Do You Have to Pay Taxes on Social Security Disability Insurance (SSDI) Benefits?

Are you applying for Social Security Disability Insurance (SSDI) benefits? If so, you may have questions about whether you will or will not have to pay taxes on your benefits if approved. Here is the question: Are SSDI benefits taxable? The short answer is that they can be—but most recipients do not actually incur any tax liability. Within this blog post, our Rogers Social Security disability attorney explains what you should know about SSDI and taxes in Arkansas. 

SSDI Benefits Can Be Subject to Federal Taxation—But it Depends on Income

SSDI benefits can be subject to federal taxation, but it depends on the recipient’s income. In general, if an individual’s total income, including their SSDI benefits, exceeds a certain threshold, a portion of their benefits may be subject to federal income tax. The specific amount of SSDI benefits that are subject to taxation varies depending on the recipient’s income level. For those with lower incomes, none of their SSDI benefits may be subject to taxation. However, for those with higher incomes, up to 85% of their SSDI benefits may be subject to federal taxation.

An Overview of How SSDI Benefits are Taxed By the IRS

How are Social Security Disability Insurance benefits actually taxed? Here is what Arkansas residents should know: The Internal Revenue Service (IRS)explains that your SSDI benefits are only taxable income if the amount you receive exceeds a certain statutory threshold: 

    • Monthly Income of $0 – $2,083: SSDI benefits not taxed: 
  • Monthly Income of $2,084 – $2,833: A maximum of 50 percent of your benefits are taxed. 
  • Monthly Income in Excess of $2,834: A maximum of 85 percent of your benefits are taxed. 

To be clear, these are the amounts for those who file for benefits as an individual. If you are filing for SSDI benefits as a married couple who files joint taxes, the thresholds are somewhat different. It is important to understand your specific tax situation when filing for SSDI benefits. 

Make Sure You Submit a Strong, Well-Supported Application for SSDI Benefits

Of course, taxes are also an issue for those who are able to get their Social Security disability claim approved. Sadly, many people struggle to get benefits paid. If you are filing for SSDI benefits, it is absolutely essential that you submit a strong and well-supported application. Among other things, this includes detailed medical documentation and reports from healthcare providers that support the claim. You do not have to navigate the claims process alone. An experienced Rogers, AR Social Security disability lawyer can help you take action to get the full and fair benefits you deserve. 

Speak to Our Rogers, AR Social Security Disability Lawyer Today

At Gallo Cazort & Co. Law Firm, our Rogers Social Security disability attorneys are skilled, experienced advocates for clients. If you have questions about SSDI and taxes, we can help. Contact our Social Security disability team today for a no cost, no strings attached case review. From our Rogers law office, we provide SSD representation in Northwest Arkansas and beyond.