If you receive Social Security disability benefits, those benefits may be taxable. Social Security disability is not a need-based program. Therefore, there are often significant differences in recipients’ taxable income even if they are not working due to a disability, and some people end up paying taxes while others do not.
According to the Social Security Administration, approximately 33% of Social Security disability recipients pay taxes on their benefits.
Your responsibility to pay taxes—and the amount of those taxes—depends on your total income as well as the income of your spouse. According to the Social Security Administration:
- If your annual income is more than $25,000 and you file your taxes as an individual, you may have to pay taxes on Social Security disability benefits.
- If your annual income is more than $32,000 and you file your taxes jointly with your spouse, you may have to pay taxes on Social Security disability benefits.
Income could include wages, interest earned, or dividends. The percentage of your benefits that are taxed will depend on the amount of income you must declare on your tax returns. Your tax rate on Social Security disability benefits will be the same as it is on your other types of income.
If you reside in Texas, your Social Security disability benefits will not be subject to a state income tax because the state does not currently impose a state income tax.
It is very important that you list your Social Security benefits as well as all other sources of income when you pay taxes. If you have questions about your Social Security benefits and your taxes, be sure to speak with a tax advisor or accountant. If you have questions about your Social Security disability claim, we encourage you to contact our experienced Social Security disability attorneys for more information.
by Paul B. Burkhalter Managing Partner of Morgan & Weisbrod, Board Certified in Social Security Disability Law.