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Are your SSDI benefits taxable?

| May 5, 2021 | Blog, Social Security Disability |

Kansas residents who are unable to work due to a medical condition or other disability are eligible to receive Social Security Disability. This is a type of benefit provided by the Social Security Administration. One of the biggest questions that people have is whether or not they owe taxes on the money that they receive.

Is it taxable?

Social Security Disability benefits may be taxable in some scenarios. In order to figure out if your benefits will be taxable, you’ll need to take a look at all of your income sources and your filing status. You’ll need to divide the benefits that you receive in half and then add that number to any other income that you may have. Other income includes unearned income like interest and dividends. Any income that your spouse brings in will also need to be added to half of the SSD benefits.

Taking a look at the tax charts

Once you have your total taxable income by adding half of your benefits to the other income sources that you have, you’ll need to take that number and look it up in the tax charts. For a person who is single or is married and filing separately, income becomes taxable at $25,000 and above. Between $25,000 and $34,000, income is taxed at 50%. Any income above $34,000 is taxed at 85%. For married couples filing jointly, anything over $32,000 is considered taxable. Between $32,000 and $44,000, the tax rate is 50%. Over $44,000, the tax rate is 85%

Receiving SSDI benefits can be a great way to help ensure that you can remain independent even though you have a long-term disability. However, these benefits can be taxable in certain situations, and it’s important to understand what those are. If you’re not sure if you qualify for these types of benefits or you’re not sure what the taxable income would be, it’s advisable to speak to an attorney.