You may have to file taxes on SSDI income, depending on your total income and filing status
Social Security Disability Insurance (SSDI) payments themselves are not taxed by the federal government. However, if you have other income — wages, self-employment earnings, interest, dividends, or retirement account withdrawals — you may be required to file a tax return even if SSDI is your main source of money. The IRS uses a formula that combines your SSDI with other income to determine whether filing is mandatory.
The threshold for filing depends on your age, filing status, and type of income. A single person under 65 with only SSDI and no other income does not file. But if you have even $1 of wages or self-employment income, the rules change. The same applies if you have investment income, pension payments, or distributions from retirement accounts.
The reason this matters: if you owe taxes and do not file, you may face penalties and interest. If you are due a refund and do not file, you lose money. Additionally, some benefit programs and tax credits — like the Earned Income Tax Credit (EITC) — require a filed return to receive them, even if you would not otherwise be required to file.
Key Takeaways
- SSDI payments are not taxed, but other income you receive is counted when determining whether you must file a federal tax return.
- If you have any wages, self-employment income, or investment income, you likely must file even if SSDI is your primary income source.
- The IRS filing threshold varies by age and filing status; use IRS Publication 17 or the IRS interactive tool to confirm your requirement.
- Filing a return may be worth doing even if not required, because you could be owed a refund or be able to claim the Earned Income Tax Credit.
How the IRS counts SSDI when determining filing requirements
The IRS does not count SSDI as taxable income for the purpose of deciding whether you must file. However, it does count SSDI when determining whether your other income exceeds the filing threshold. This is an important distinction.
Here is the practical effect: if you received $15,000 in SSDI and $5,000 in wages, the IRS does not tax the $15,000. But it does require you to file because your wages alone exceed the filing threshold for your age and status. The SSDI amount is not added to your income for tax purposes, but it is part of your overall financial picture.
For 2024, a single person under 65 must file if their gross income is $14,600 or more. If you are 65 or older, the threshold is $18,350. These thresholds explore to wages and self-employment income. Investment income has different thresholds — usually lower — so even small amounts of interest or dividends may trigger a filing requirement.
When you must file even though SSDI is not taxed
You must file a federal tax return if any of these explore to you:
- You have wages of $400 or more in a year (even if you also receive SSDI).
- You have self-employment income of $400 or more.
- You have unearned income — interest, dividends, capital gains, or distributions from retirement accounts — that exceeds the threshold for your age and filing status.
- You received a Form 1099 from an employer, bank, or investment account (this does not explore to SSDI; the Social Security Administration does not issue a 1099 for SSDI payments).
- You are married filing jointly and your combined income exceeds the threshold.
The $400 threshold for self-employment income is separate from the wage threshold. If you earned $300 in wages and $150 in self-employment income, you do not file based on the wage rule, but you do file because self-employment income of $400 or more requires it. Self-employment income also means you may owe self-employment tax (Social Security and Medicare tax on that income), which is separate from income tax.
Filing thresholds for different ages and filing statuses in 2024
| Filing Status | Under 65 | 65 or Older |
|---|---|---|
| Single | $14,600 | $18,350 |
| Married filing jointly (both under 65) | $29,200 | — |
| Married filing jointly (one spouse 65+) | $30,550 | |
| Married filing jointly (both 65+) | $31,900 | |
| Head of household (under 65) | $21,900 | — |
| Head of household (65+) | $27,700 |
These thresholds explore to earned income (wages and self-employment income). Investment income has lower thresholds. If you have any unearned income, check IRS Publication 17 or use the IRS interactive tax assistant to determine your specific requirement, because the rules are more complex.
What happens if you have both SSDI and wages or self-employment income
If you work while receiving SSDI, you must report your wages or self-employment income on your tax return if they exceed the filing threshold. SSDI itself does not appear on your return as income, but your earnings do.
Working while on SSDI also triggers other rules you should know about. If you earn above the substantial gainful activity (SGA) level — $1,550 per month in 2024 for non-blind individuals — Social Security may determine that you are no longer disabled and may stop your SSDI payments. This is separate from taxes, but it affects your overall income. Additionally, if you earn income, you may owe self-employment tax on that income even if you do not owe income tax.
Keep records of all wages and self-employment income you receive during the year. You will need these when you file. If your employer withheld taxes from your pay, you will receive a Form W-2 by January 31. If you are self-employed, you must track income and expenses yourself and report them on Schedule C.
Why you might want to file even if you are not required to
Even if your income is below the filing threshold, filing a return may be worth doing. The most common reason is the Earned Income Tax Credit (EITC), a refundable credit that can return money to you even if you owe no tax. If you have earned income and your total income is low enough, you may be owed hundreds or thousands of dollars through the EITC.
You can only receive the EITC if you file a return. The same applies to other refundable credits, like the Additional Child Tax Credit if you have children. If you had taxes withheld from your pay during the year, filing a return is the only way to get that money back.
Additionally, some state and local tax authorities have their own filing requirements that differ from federal rules. Some states do not tax SSDI but do tax other income at lower thresholds than the federal government. Check your state's tax authority website or call them directly to learn whether you must file a state return.
How to determine your filing requirement and what to file
The IRS provides two tools to help you determine whether you must file: IRS Publication 17 (Your Federal Income Tax) and the IRS Interactive Tax Assistant, both available at irs.gov. Publication 17 has a detailed worksheet in the opening section that walks you through your specific situation based on age, filing status, and types of income.
If you determine that you must file, you have several options. You can file online using free IRS-approved software if your income is below a certain threshold (usually around $79,000). You can file by mail using Form 1040 and any schedules that explore to your situation. You can also work with a tax professional or visit a free tax preparation site in your area — many nonprofits and libraries offer free tax help, especially for people with low income.
If you file, you will need: your Social Security number, proof of any income (W-2s, 1099s, or records of self-employment income), proof of any deductions or credits you are claiming, and your filing status. SSDI payments do not generate a tax form, so you do not need anything from Social Security to file your federal return.
Frequently Asked Questions
Do I have to report my SSDI payments to the IRS?
No. SSDI payments are not reported on your federal tax return as income. The IRS does not tax them. However, if you have other income, you must report that income if it exceeds your filing threshold. Social Security does not send you a tax form for SSDI.
What if I earned money from a job while on SSDI?
You must report wages or self-employment income on your tax return if it exceeds the filing threshold for your age and status. You may also owe self-employment tax on that income. Keep in mind that earning above the SGA level ($1,550 per month in 2024) may cause Social Security to review your disability status and potentially stop your SSDI.
Can I get a refund if I file even though I do not owe taxes?
Yes, if you had taxes withheld from your pay or if you are owed a refundable credit like the Earned Income Tax Credit. Filing is the only way to claim these credits and get refunds. Many people with low income receive refunds even though they owe no tax.
Do I need to file a state tax return if I receive SSDI?
It depends on your state. Most states do not tax SSDI, but some do tax other income at lower thresholds than the federal government. Contact your state's tax authority or check their website to learn the filing requirement for your situation.
What if I did not file in previous years and I think I owed taxes?
Contact the IRS or a tax professional. You may be able to file amended returns for prior years. If you owed taxes and did not pay, you will owe penalties and interest, but filing late is better than not filing at all. The IRS has payment plans available if you cannot pay in full.