Do You Have to Report SSI on Taxes?
Understand the tax implications of receiving government benefits. Learn why SSI is treated differently than other Social Security income for tax purposes.
Supplemental Security Income (SSI) payments are not taxable by the federal government and do not need to be reported on an income tax return. If your only source of income is from SSI, you generally have no requirement to file a tax return. These payments are designed to meet the basic needs of aged, blind, and disabled individuals with limited resources and are not considered earned income for tax purposes.
Distinguishing SSI from Other Social Security Benefits
A distinction exists between SSI and other benefits the Social Security Administration (SSA) manages. SSI is a needs-based program funded by general U.S. Treasury funds, not by Social Security taxes. Its purpose is to provide financial support to individuals who have limited income and resources, regardless of their work history. Because SSI is a non-taxable benefit, the SSA does not issue a Form SSA-1099 for these payments.
In contrast, Social Security benefits such as retirement, survivor, and Social Security Disability Insurance (SSDI) are earned benefits. Eligibility for these is based on your work history and the FICA taxes you and your employers have paid. Unlike SSI, these other benefits can be taxable. Recipients of retirement, survivor, or SSDI benefits receive a Form SSA-1099, the “Social Security Benefit Statement,” each January, which details the total benefits received.
Determining if Other Income Creates a Taxable Situation
While SSI payments are never taxable, receiving other income alongside certain Social Security benefits can make those other benefits subject to tax. The Internal Revenue Service (IRS) uses a figure called “combined income,” also known as provisional income, to determine if a portion of your non-SSI Social Security benefits is taxable.
The formula for combined income is your Adjusted Gross Income (AGI) plus any nontaxable interest plus one-half of your Social Security benefits. Your AGI includes wages, self-employment earnings, and other taxable income, but it does not include your SSI payments. The Social Security benefits part of the formula only includes amounts from programs like retirement or SSDI, which are reported on Form SSA-1099.
The IRS sets income thresholds to determine taxability. For a single filer, combined income between $25,000 and $34,000 means up to 50% of your benefits may be taxed. If that income is over $34,000, up to 85% may be taxable. For those married filing jointly, the 50% threshold is for income between $32,000 and $44,000, and the 85% threshold applies to income over $44,000.
Consider a single individual who receives $15,000 in SSDI benefits and earns $12,000 from a part-time job. Their AGI is $12,000. To find their combined income, they add their AGI ($12,000) to half of their SSDI benefits ($7,500), for a total of $19,500. Since this amount is below the $25,000 threshold for single filers, none of their SSDI benefits are taxable.
How to Report Taxable Social Security Benefits
If a portion of your non-SSI Social Security benefits is taxable, you must report it on your federal income tax return. You will need Form SSA-1099, which the SSA sends by January, showing the total benefits you received during the year in Box 5.
On Form 1040 or Form 1040-SR for seniors, you report the total benefits from Box 5 of your SSA-1099 on Line 6a. After calculating the taxable portion of your benefits, you will enter that amount on Line 6b.
The IRS provides a worksheet in the Form 1040 instructions to help with this calculation and determine the exact taxable amount for Line 6b. If you know your benefits will be taxable, you can request voluntary tax withholding from your payments by submitting Form W-4V to the Social Security Administration.