Do You Claim Social Security Disability on Taxes?

Social Security Disability (SSD) benefits can be subject to federal income tax, with specific rules outlined by the Internal Revenue Service (IRS). Understanding these regulations is important for recipients to manage their financial obligations accurately.

Taxability of Social Security Disability Benefits

Social Security benefits, including disability payments, can be subject to federal income tax based on a calculation involving “provisional income.” This income is determined by adding your adjusted gross income (AGI), any nontaxable interest income, and half of your total Social Security benefits. This calculated amount is then compared against specific thresholds to determine the taxable portion of your benefits.

For individuals filing as single, head of household, or qualifying surviving spouse, if provisional income falls between $25,000 and $34,000, up to 50% of Social Security benefits may be taxable. If provisional income exceeds $34,000, up to 85% of the benefits could be subject to tax. For those married filing jointly, the first threshold is $32,000; if provisional income is between $32,000 and $44,000, up to 50% of benefits may be taxable. If their provisional income goes above $44,000, up to 85% of their Social Security benefits may be taxable.

To illustrate, consider a single filer receiving $15,000 in Social Security disability benefits and $10,000 in other adjusted gross income, with no tax-exempt interest. Their provisional income would be $10,000 (AGI) + $0 (nontaxable interest) + $7,500 (half of benefits) = $17,500. Since $17,500 is below the $25,000 threshold for single filers, none of their Social Security benefits would be taxable.

Consider another example for a single filer receiving $20,000 in Social Security disability benefits and $20,000 in other adjusted gross income. Their provisional income would be $20,000 (AGI) + $10,000 (half of benefits) = $30,000. This amount falls between $25,000 and $34,000, meaning up to 50% of their Social Security benefits could be taxable. The taxable amount would be the lesser of 50% of the benefits ($10,000) or 50% of the difference between the provisional income and the first threshold ($30,000 – $25,000 = $5,000; 50% of $5,000 = $2,500). In this case, $2,500 of their benefits would be taxable.

If a single filer has $20,000 in Social Security disability benefits and $30,000 in other adjusted gross income, their provisional income would be $30,000 (AGI) + $10,000 (half of benefits) = $40,000. This exceeds the $34,000 threshold, so up to 85% of their benefits could be taxable.

Reporting Your Benefits on Your Tax Return

Recipients of Social Security benefits, including disability, receive Form SSA-1099, “Social Security Benefit Statement,” annually from the Social Security Administration (SSA) by January. This form details the total amount of benefits received, which is reported in Box 5 of the form.

The SSA-1099 also shows any amounts withheld for Medicare premiums and any federal income tax withheld. This statement is crucial for accurately completing your federal income tax return. If you receive multiple SSA-1099 forms, you should combine the amounts from all forms when reporting your benefits.

To report your Social Security benefits, you will use Form 1040 or Form 1040-SR. The total amount of benefits received, as shown in Box 5 of Form SSA-1099, is entered on Line 6a of Form 1040. The taxable portion of your Social Security benefits, which you would have calculated based on your provisional income, is then reported on Line 6b of Form 1040. Worksheets found in the instructions for Form 1040 or in IRS Publication 915 can assist in determining this taxable amount.

Important Considerations for Disability Recipients

It is important to distinguish between Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI) as their tax treatment differs significantly. SSI is a needs-based program providing financial assistance to aged, blind, or disabled individuals with limited income and resources. SSI payments are generally not taxable income.

SSDI, on the other hand, is an insurance program for those who have worked and paid Social Security taxes, and it is the type of disability benefit that can be subject to federal income tax based on the provisional income thresholds. If SSDI is your only source of income, it is unlikely to be taxed.

While federal rules govern the taxation of Social Security benefits, some states also impose taxes on these benefits. For the 2025 tax year, nine states tax benefits. These states often have their own income thresholds or deductions that may reduce or eliminate the state tax liability on Social Security benefits. It is advisable for recipients to consult their specific state’s tax laws or a tax professional to understand any state-level taxation.

If a disabled individual receives Social Security benefits on behalf of a dependent, such as a child, those benefits are generally considered the dependent’s income for tax purposes. The taxability of these benefits is determined based on the dependent’s total income, not the recipient’s. The same provisional income rules apply to them.