Frequently Asked Questions About Social Security Disability Insurance (SSDI) Taxes
- Must recipients file taxes on Social Security Disability Insurance (SSDI)?
In some cases, Social Security Disability Insurance (SSDI) payments received from the Social Security Administration (SSA) are subject to federal tax. Recipients who are married filing jointly pay no tax on combined annual income below $32,000 a year. This figure includes half of the recipient’s SSDI benefits. A portion of SSDI benefits above this figure will be subject to federal tax. SSDI benefits are exempt from most state taxes. Because taxation of SSDI benefits is a complicated matter, it is typically wise to seek the advice of an experienced accountant.
- Will recipients get a 1099 for Social Security Disability Insurance (SSDI)?
The Social Security Administration (SSA) issues form SSA-1099 to all beneficiaries who received SSDI benefits in a given year—even though some two-thirds of recipients are not subject to taxation. Form SSA-1099 shows exactly how much the beneficiary has received in SSDI benefits from SSA that year. Beneficiaries should always retain this form for use when they file both state and federal income taxes.