You may have to file taxes even though you receive SSDI

Whether you file taxes depends on how much money you earned that year, not on whether you receive SSDI. Social Security Disability Insurance (SSDI) benefits themselves are not taxable income. But if you have other income — from work, a pension, interest, or investments — you may owe taxes, and you may have to file a return.

The IRS sets income thresholds each year. If your total income falls below that threshold, you do not have to file. If it exceeds the threshold, you do. The threshold changes annually and depends on your age and filing status.

The key point: SSDI payments do not count toward the threshold. Only your other income does.

Key Takeaways

  • SSDI benefits themselves are never taxable, so they do not trigger a filing requirement on their own.
  • You must file if your non-SSDI income (wages, self-employment, pensions, interest) exceeds the IRS threshold for your age and filing status.
  • The IRS threshold changes each year, so you need to check the current year's limit, not last year's.
  • If you work while on SSDI, your wages count toward the threshold and may require you to file, even if you earn very little.

How the IRS counts income when you receive SSDI

The IRS has a standard deduction — an amount of income you can earn without owing federal income tax. For 2024, that amount varies by age and filing status. If you are single and under 65, the standard deduction is $14,600. If you are 65 or older, it is $17,550. If you are married filing jointly and both spouses are under 65, it is $29,200.

Your SSDI payment does not reduce this threshold. It does not count as income for tax purposes at all. So if you are single, under 65, and received $20,000 in SSDI last year but earned $10,000 from part-time work, your taxable income is $10,000 — below the $14,600 threshold. You would not have to file.

But if you earned $15,000 from work, your taxable income is $15,000 — above the threshold. You would have to file, even though most of your money came from SSDI.

Types of income that require you to file

Any money you earned counts toward the filing threshold. This includes wages from an employer, self-employment income, rental income, interest from a savings account, dividends from stocks, and income from a pension or annuity.

Some people on SSDI work part-time or do freelance work. That income counts. Some receive a pension from a previous job. That counts too. Some have a small savings account that earns interest. That counts. The IRS adds all of these together to determine whether you cross the threshold.

SSDI does not count. Supplemental Security Income (SSI) does not count. Veterans benefits do not count. Only earned and unearned income outside of these programs matters for the filing decision.

What happens if you do not file when you should

If your income exceeds the threshold and you do not file, the IRS may eventually contact you. They may assess penalties and interest on any taxes owed. They may also hold up a tax refund you are may have access to to — if you overpaid taxes through withholding, you cannot claim that refund without filing a return.

Many people on SSDI have taxes withheld from other income sources, like wages or pensions. If you do not file, you lose the chance to claim that money back. Filing can sometimes result in a refund even if you owe no tax.

The safest approach: if you are unsure whether you have to file, file anyway. Filing when you are not required to does not create a problem. Not filing when you should can.

How to learn about you must file this year

The IRS publishes a filing requirement chart each year on their website (irs.gov). You can look up your age, filing status, and income type to see whether you cross the threshold. The chart updates in January for the previous tax year.

You can also call the IRS at 1-800-829-1040. They can tell you whether filing is required based on your specific situation. This is a free service.

If you work with a tax preparer or accountant, they can review your income and tell you whether you must file. Many community organizations and libraries also offer free tax preparation help, especially for people with lower incomes.

Filing your taxes when you receive SSDI

If you must file, you file the same way anyone else does. You complete a Form 1040 (the main federal income tax form) and report all your income except SSDI. You claim the standard deduction (or itemize deductions if that benefits you). You calculate any tax owed or refund due.

You do not need to mention SSDI on your return. It does not appear on any tax form because it is not taxable income. You only report your other income sources.

If you are unsure how to file, the IRS offers free filing software through their Free File program if your income is below a certain threshold. You can also use a tax preparer. Many offer reduced rates for people with disabilities or lower incomes.

Self-employment income and SSDI

If you work for yourself while on SSDI, your self-employment income counts toward the filing threshold just like wages do. You must report it on Schedule C (Profit or Loss from Business) and attach it to your Form 1040.

Self-employment income also has its own rules. If your net self-employment income is $400 or more, you must file a return even if it falls below the standard deduction threshold. This is a separate rule from the standard deduction rule, and it applies regardless of your age or filing status.

So if you are self-employed and earn $500, you must file even if you are under 65 and that $500 is your only income. The $400 threshold for self-employment is lower than the standard deduction threshold.

Frequently Asked Questions

Do I have to report my SSDI to the IRS when I file?

No. SSDI is not taxable income, so it does not appear on your tax return. You only report income from other sources — wages, self-employment, pensions, interest, and similar income. The IRS already knows you receive SSDI from Social Security's records, so you do not need to mention it.

What if I earned money from work but it was less than the standard deduction?

You do not have to file if your total income is below the standard deduction for your age and filing status. However, you may want to file anyway if taxes were withheld from your paychecks, because filing allows you to claim a refund of that money.

Can I file my taxes online if I receive SSDI?

Yes. You file the same way anyone else does — online through free IRS software, through a tax preparer, or by mailing a paper return. SSDI does not change the filing process. Use the IRS Free File program if your income qualifies, or hire a preparer if you prefer.

What if I have questions about whether my specific income counts?

Call the IRS at 1-800-829-1040 or visit irs.gov and use their interactive tax assistant tool. You can also contact a tax preparer or visit a free tax preparation site in your area. These resources can review your specific income sources and tell you whether you must file.

Does receiving SSI instead of SSDI change whether I have to file?

No. SSI (Supplemental Security Income) is also not taxable income. The filing requirement depends only on your other income — wages, self-employment, pensions, interest, and similar sources. Whether you receive SSDI, SSI, or both does not change the threshold.