If your Social Security disability income is your only income, you don’t have to file a federal tax return. However, any earnings you have such as work earnings or self-employment income may require you to report your Social Security disability income and cause a portion of your benefits to be taxed at normal income tax rates.
Social Security Disability Overview
For you to get Social Security disability benefits, you need to have earned the required number of work credits and have paid Social Security taxes when you were working. As of 2013, you earn a work credit for every $1,160 you made during the year and you can get a maximum of four annually. Generally 40 work credits are needed, but you can qualify with less if you’re disabled at a younger age. You must also have a qualifying disability that is long-term or terminal and prevents you from doing your current job or adapting to a new line of work.
Reporting Your Social Security Income
If your gross income tops your filing status’ standard deduction plus one exemption amount, you have to file a tax return. Your Social Security disability benefits don’t count towards your gross income. However, if you’re required to report your Social Security benefits because of your gross income, you can get your amounts from Form SSA-1099 the SSA sends to you and all beneficiaries every January.
Calculating Your Combined Income
The IRS determines the taxability of your disability benefits by calculating your combined income. This includes a variety of incomes you may have. Other sources of taxable income besides wages and self-employment earnings include dividends from investments and life insurance. On top of all these income sources, add half of your Social Security benefit.
Single People and Married Couples
If your tax filing status is single, up to 50 percent of your Social Security benefits are taxed if your combined income is between $25,000 and $34,000, and up to 85 percent of your benefits are taxed after $34,000. If you’re married and file a joint tax return, your spouse’s income is added to yours to calculate your combined income. If your annual household income surpasses $32,000, up to 50 percent of your benefits are taxed and up to 85 percent if your combined household income is more than $44,000 per year.
- Social Security Administration: Benefits Planner: Income Taxes And Your Social Security Benefits
- Turbo Tax: When Does a Senior Citizen on Social Security Stop Filing Taxes?
- Social Security Administration: Congressional Statistics, December 2011
- Social Security Administration: Disability Planner: How Much Work Do You Need?
- Social Security Administration: Disability Planner: What We Mean By Disability
- John Rowley/Digital Vision/Getty Images
- FHA Guidelines for Employment Gaps
- Can I Take a Deduction for Pretax Health Dollars?
- Can Someone Explain the FICA Tax Overpayment?
- How Much Social Security Tax Do You Have to Pay?
- What Receipts Are Safe to Throw Away vs. Shred?
- How to Refinance Using FHA Streamline With Non-Occupancy Co-Borrowers
- How to Find Out How Much Money I Made Last Year
- How to Know if I'm on Track for Retirement
- How to Add a Qualifying Child You Never Used Before to Your Taxes
- Can I Apply for an Early Pension if I'm on Workers' Comp?