Are Social Security Disability Benefits Taxable?

How to prove you are disabled
and win disability benefits

The simple answer to this is that Social Security disability benefits are taxable. However, you "may or may not" have to pay tax on your disability benefits. Social Security issues a miscellaneous SSA 1099 for disability benefits paid each year.

The two potential types of Social Security disability benefits that are taxable are: A) Monthly disability benefit payments and B) Lump-sum back payments of disability benefits. How much of your disability benefits will be taxable depends on the total amount of your Social Security disability benefits and any other income. Currently, your Social Security disability benefits may be taxable if your total income exceeds $25000.00 as an individual, or $32000.00 for a couple.

Lump sum payments of retroactive disability benefits can be a little more tricky since they often involve payment for years prior to the year you receive your SSA 1099. Conventional wisdom seems to indicate that it is easier to just claim all the lump sum back payment in the year that you receive the payment rather than filing amended returns for any previous years. The IRS publication 915 deals with Social Security benefit taxation and provides useful worksheets to help you figure out if your Social Security disability benefits are taxable.

There are also some potential deductions and credits for disability claimants who received a lump sum retroactive back payment of benefits. You may be able to deduct expenses that you paid to get your retroactive disability benefits. If you had a representative or attorney, you may be able to deduct their fee from the taxable part of your SSDI benefits. If you had to repay your employer’s or your long-term disability insurance company out of your back payment, you may be able to deduct the amount you had to repay. These deductions can be complicated to figure out so it is advisable to obtain the services of a tax professional to help you calculate your deductions.

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Topics and Questions

How do I see a judge for my social security disability case or SSI Claim?

How does social security disability define work quarters ?

How much time does it take to get an SSI Decision?

Crucial Information about the Social Security Disability Application Process and SSI

Applying for disability benefits in New Jersey

Does a person with severe keratoconus qualify to receive a disability grant?

Will You Be Denied For Disability If Your Records Indicate You Can Return To Work?

What Are the Chances of Winning an SSA Disability Appeal?

The Qualification Criteria for Social Security Disability and SSI

Social Security Disability, Medical Records, and a Person's Limitations

Who is the DDS Doctor, i.e. the Social Security Doctor?

What happens if my social security disability application is denied?

What makes you eligible for Social Security Disability or SSI?

How does a Medical Source Statement (RFC Form) help win a Social Security Disability or SSI Claim?

Should you get a Non-Attorney Disability Representative for a Social Security or SSI case?

If my medical condition keeps me from working will I get Social Security disability ?

Social Security Disability, SSI, and Residual Functional Capacity, RFC

What Benefits come with SSI Disability?

How do you Apply for SSI?

What are the Application Requirements For SSI Disability

Hiring a Qualified Disability Lawyer in Mississippi

Reconsideration of a disability denial-what does it involve?

If you receive a Social Security Disability Denial quickly does that mean the case is weak?

Eligibility for Disability Benefits as Viewed by Social Security

SSD and SSI are Federal Programs

The title II Social Security Disability and title 16 SSI Disability programs operate under federal guidelines and, therefore, the program requirements--medical and non-medical--apply to all states:

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Indiana, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming

Recent approval and denial statistics for various states can be viewed here:

Social Security Disability, SSI Approval and Denial Statistics by state

Special Section: Disability Lawyers and unnecessary claim denials