Many believe that the benefits they receive from Social Security disability are not taxable. This is true for persons whose income does not rise to the level where taxes are imposed. However, in certain situations benefits are subject to taxes.
Essentially, there are two programs under which individuals are classified. Namely, SSDI and SSI. SSDI stands for Social Security Disability Insurance. This program pays benefits to disabled persons who are unable to work despite their income. SSI stands for supplemental Security Income which pays benefits who are unable to work and have little income.
Regarding SSDI, some individuals may be required to pay taxes depending on the amount of disability benefits you receive in addition to other income such as wages, from business or investments. For joint filers, if income is over 32, 000 dollars then you may have to pay taxes. For single individuals whose total income is under 25, 000 dollars no taxes should be imposed. In most cases, those under SSDI income levels will be low enough so no taxes will be levied. However, for married couples a spouse’s earnings might raise their total level of income above the threshold.
For those who receive benefits under SSI, eligibility for benefits is base primarily on financial need; therefore, no taxes are imposed.
It is best to seek answers from Social Security offices regarding possible need to pay taxes on your benefits since it can be complicated depending on your marriage status and sources of outside income.