How SSDI Counts Work Expenses Against Your Earnings

During your Trial Work Period, Social Security subtracts certain work expenses from your gross earnings before deciding whether you've exceeded the monthly earnings limit. This means you can earn more in actual wages and still stay under the threshold that would end your benefits. The expenses must be directly tied to your ability to work and must be reasonable for the type of work you do.

Not every cost you pay gets subtracted. Social Security has a specific list of allowable expenses, and the rules differ depending on whether you're self-employed or working for someone else. Understanding which expenses count can mean the difference between keeping your benefits through the entire Trial Work Period and losing them early.

Key Takeaways

  • Work expenses are subtracted from your gross earnings, so a higher gross wage can still keep you under the monthly earnings limit.
  • Allowable expenses include impairment-related work expenses, plans to achieve self-support costs, and certain items needed because of your disability.
  • Expenses must be reasonable, necessary for you to work, and directly connected to the job itself — not general living costs.
  • Self-employed workers and employees have different rules; self-employed people can deduct more categories of business expense.
  • You must report all work expenses to Social Security; they do not automatically know about costs you pay unless you tell them.

Impairment-Related Work Expenses (IRWE)

An Impairment-Related Work Expense, or IRWE, is a cost you pay because of your disability that lets you work. Social Security subtracts these from your earnings dollar-for-dollar. The expense must be something a person without your disability would not need to pay, and it must be necessary for you to do your job.

Common examples include a wheelchair lift for your vehicle, a personal attendant to help you at work, specialized transportation to and from your job, medical devices or equipment you use while working, and medication you take specifically to control symptoms that would otherwise prevent you from working. If you're deaf, an interpreter counts. If you have a mobility impairment and need a cane or walker, that counts. If you need a service animal trained for your disability, the costs of maintaining and training that animal count.

The expense does not have to be paid directly to your employer. You can pay a third party — a transportation service, a medical supplier, a personal care attendant — and still report it as an IRWE. What matters is that you pay it, it relates to your disability, and it makes work possible.

Plans to Achieve Self-Support (PASS) Expenses

If you have an approved Plan to Achieve Self-Support, or PASS, Social Security excludes the money you set aside under that plan from your earnings calculation. This is a separate program that lets you set aside income and resources toward a work goal — usually education, training, or starting a business — without losing your benefits.

PASS expenses are not deducted from your monthly earnings the way IRWEs are. Instead, the income you allocate to your PASS goal is not counted as earnings at all. For example, if you earn $2,000 a month and your PASS plan directs $600 of that toward vocational training, Social Security counts only $1,400 as your earnings for the month. You must have a written PASS plan approved by Social Security before these expenses are excluded, and you must follow the plan as written.

Work Expenses for Self-Employed People

If you're self-employed, you can deduct ordinary and necessary business expenses from your net earnings, similar to how a business owner calculates profit. This includes rent or mortgage for a workspace, utilities, equipment, supplies, insurance, and wages you pay to employees. You calculate your net self-employment income the same way you would for tax purposes, then report that net figure to Social Security.

Self-employed workers can also claim IRWEs on top of business expenses. For instance, if you run a home-based business and pay for a personal attendant to help you during work hours, that attendant cost is an IRWE and is subtracted separately from your net self-employment earnings. The key is that business expenses reduce your net income first, and then impairment-related expenses are subtracted from that net figure.

What Does Not Count as an Allowable Expense

Social Security does not subtract general living costs, even if paying them makes it possible for you to work. Rent or mortgage for your home, groceries, utilities for your home, childcare, car payments, car insurance, and phone service do not count — these are costs anyone has, whether they work or not. The expense must be something your disability creates or something tied directly to performing your job.

Clothing does not count unless it is specialized work clothing required by your job and not suitable for everyday wear — for example, a uniform or safety gear. Meals do not count unless you must eat at a specific location as part of your job and cannot eat elsewhere. Taxes and Social Security contributions on your wages do not count. Loan repayment, credit card payments, and other debt service do not count. Therapy or counseling costs do not count unless they are directly tied to your ability to perform a specific job task.

Expenses you would have paid anyway do not count. If you already took medication before you started working, that medication is not an IRWE. If you already owned a car, the car itself is not an IRWE — but a disability-specific modification to the car, like hand controls or a lift, would be.

How to Report Work Expenses to Social Security

You must tell Social Security about your work expenses; the agency does not automatically know about them. During your Trial Work Period, report your gross earnings and your allowable expenses on the Earnings Report form, which you can submit online through your Social Security account, by mail, or by phone. Be specific: list each expense, the amount, and why it is necessary because of your disability.

Keep receipts and documentation for every expense you claim. Social Security may ask you to prove that an expense is real, necessary, and disability-related. If you claim a personal attendant as an IRWE, have a record of what the attendant does and how much you pay. If you claim transportation, have receipts or invoices. If you claim equipment, have the receipt and a note about why you need it for your specific job.

If you have a PASS plan, Social Security already has documentation of those expenses because the plan is written and approved. You still report your earnings, but the PASS expenses are already factored into how Social Security calculates your countable income.

How Expenses Affect Your Trial Work Period Earnings Limit

During your Trial Work Period, you can earn up to a certain amount each month without losing your benefits for that month. In 2024, that limit is $1,090 (this amount changes each year). When you report work expenses, Social Security subtracts them from your gross earnings. If your gross earnings minus allowable expenses fall below the limit, you have a non-work month and keep your full benefit payment.

For example, if you earn $1,500 gross but have $600 in allowable IRWEs, your countable earnings are $900. Since $900 is below the $1,090 limit, that month counts as a non-work month. You keep your full benefit and the month still counts toward your nine-month Trial Work Period. Without the expense deduction, you would have exceeded the limit and lost your benefit for that month.

The Trial Work Period lasts nine months, and you need nine non-work months to complete it successfully. Deducting allowable expenses can help you stay under the limit and preserve your non-work months, which means you can stay in the Trial Work Period longer and earn more total wages before it ends.

Frequently Asked Questions

Can I deduct the cost of my disability medication as a work expense?

Only if the medication is necessary for you to work and you would not take it otherwise. If you took the medication before you started working, it does not count as an IRWE. If you started the medication specifically to manage symptoms that would prevent you from working, and you need it to stay at your job, it may count. You must explain the connection to Social Security.

Does my employer have to pay for my work expenses, or can I pay for them myself?

You can pay for them yourself and still report them as deductions. Social Security does not care who pays — only that the expense is real, necessary because of your disability, and directly tied to your ability to work. If your employer pays, you do not report it as your expense.

What if I have a PASS plan and also have impairment-related work expenses?

You can use both. Your PASS expenses are excluded from your earnings calculation, and your IRWEs are subtracted from your remaining countable earnings. Report both to Social Security so they are both accounted for in your monthly earnings calculation.

Do I need to report work expenses every month, or only when I claim them?

Report them every month you incur them. If you pay for a personal attendant every week, report that expense every month. If you pay for a one-time equipment purchase, report it in the month you paid for it. Social Security needs the actual monthly breakdown to calculate your countable earnings correctly.

What happens if Social Security denies an expense I claimed?

Social Security will tell you why they did not count it. You can provide more documentation, explain the connection to your disability and your job, or request reconsideration. If you disagree with their decision, you have the right to appeal. Keep all receipts and records so you can support your claim if needed.