Old man in wheelchair reading through social security documents

Are SSD Benefits Taxable?

When you are unable to work due to a disability, it can prove very difficult to make ends meet. That’s why the government created Social Security Disability (SSD) benefits. SSD benefits, which are offered through the Social Security Administration (SSA) provide assistance to those living with disabilities and other medical conditions. When considering the purpose of SSD benefits, it can be hard to imagine that they would be subject to taxes. And while it’s true that most SSD benefits are not counted as taxable income, there are some exceptions.  

There are two main types of SSD benefits:

  • Social Security Disability Insurance (SSDI) benefits; and
  • Supplemental Security Income (SSI) benefits.

SSDI benefits are based on your prior work history, while SSI benefits are given to low-income individuals.

When Might Your SSD Benefits Be Taxable?

Since most SSD benefits are not taxable income, you may be wondering which ones are? If you or your spouse receives SSDI benefits in addition to another source of income, your SSD benefits could be taxed. However, if you already had enough income for your SSD benefits to be taxed, you likely wouldn’t qualify for SSI. Put simply, generally, income limits for your SSD benefits usually apply to recipients of SSDI benefits. So, what are these income limits we’re talking about? 

You Make Over a Specific Income Limit

The following income limits will result in about half of your benefits being taxed. 

  • Individual income of over $25,000 but less than $34,000
  • Combined income of over $32,000 if filing taxes jointly

Individuals with over $34,000 and married couples with over $44,000 could have 85% of their benefits taxed. 

You Owe Back Taxes

When someone is disabled but was not receiving SSD benefits for a period of time (and is to receive these benefits now), or when a survivor of a worker who received benefits passes away, these benefits are usually paid out in a lump sum. This lump sum payment can be subject to taxes for the year received. This could in turn place you in a higher income bracket, further increasing the taxes owed. 

The Las Vegas SSD Attorneys at Roeschke Law, LLC Can Help

If you find that you are having a tough time fully understanding the potential tax ramifications of your SSD benefits, not to worry – you are not alone. However, you may wish to consult with a qualified Nevada disability benefits attorney who can help to walk you through the process and help ensure that you are following the requirements of the law. 

Additionally, if you or a loved one is struggling with a disability that prevents you from working, you may not know how to proceed. Fortunately, the attorneys at Roeschke Law, LLC can help. We understand the impact that a disability can have on your physical, emotional, and financial health. That’s why it’s our mission to help you. To learn more, or to schedule a consultation, contact us today!