Do You Pay Income Tax on Social Security Disability?

Social Security Disability (SSD) benefits provide financial assistance to individuals unable to work due to a significant medical condition. While Supplemental Security Income (SSI) payments are not taxable, Social Security Disability Insurance (SSDI) benefits can be taxable for some individuals. The taxability of SSDI benefits depends on a recipient’s overall income level, meaning not everyone who receives these benefits will owe federal income tax on them.

Determining Taxability

Whether your Social Security Disability benefits are subject to federal income tax hinges on your “combined income.” This figure is calculated by adding your adjusted gross income (AGI), any nontaxable interest you received, and one-half of your total Social Security benefits for the year. Your AGI includes income from various sources like wages, self-employment, interest, dividends, and pension payments. Nontaxable interest typically comes from sources such as municipal bonds.

The Internal Revenue Service (IRS) establishes specific income thresholds to determine if your benefits are taxable. For the 2024 and 2025 tax years, if you file as an individual (single, head of household, or qualifying surviving spouse), your Social Security benefits are not taxed if your combined income is less than $25,000. If you are married filing jointly, this threshold is $32,000. For those married filing separately who lived with their spouse at any point during the tax year, the threshold is $0, meaning benefits are likely to be taxable. This threshold system ensures that individuals with lower overall incomes, who often rely heavily on their Social Security benefits, are not burdened with additional tax liabilities. Understanding this initial calculation is the first step in determining your tax obligations.

Calculating Taxable Benefits

Once your combined income exceeds the initial thresholds, a portion of your Social Security benefits may become taxable. The taxation occurs in two tiers.

If your combined income is between $25,000 and $34,000 for individual filers, or between $32,000 and $44,000 for those married filing jointly, up to 50% of your Social Security benefits may be included in your taxable income. For example, if a single filer has a combined income of $30,000 and receives $12,000 in Social Security benefits, the taxable portion would be the lesser of half the benefits ($6,000) or half the difference between their combined income and the base amount ($30,000 – $25,000 = $5,000; half of $5,000 is $2,500). In this case, $2,500 would be taxable.

If your combined income exceeds $34,000 for individual filers, or $44,000 for those married filing jointly, up to 85% of your Social Security benefits may be taxable. This higher percentage applies once your income surpasses the second set of thresholds. For instance, if a single filer has a combined income of $40,000 and receives $15,000 in Social Security benefits, the calculation becomes more involved, potentially including 50% of the benefits between the first and second thresholds, plus 85% of the amount above the second threshold. The maximum amount of Social Security benefits that can ever be taxed is 85%, regardless of how high your income is.

Reporting Benefits for Tax Purposes

Recipients of Social Security benefits receive Form SSA-1099, the Social Security Benefit Statement, each January. This form details the total amount of benefits received in the previous year, with Box 5 showing the net amount of benefits paid. This form is essential for accurately reporting your Social Security income on your federal tax return.

When filing your federal income tax return, the total Social Security benefits from Box 5 of Form SSA-1099 are typically reported on Line 6a of Form 1040, the U.S. Individual Income Tax Return. The calculated taxable portion of your benefits is then reported on Line 6b.

To proactively manage potential tax liabilities, individuals receiving Social Security benefits can opt for voluntary federal income tax withholding. This can be done by submitting Form W-4V, Voluntary Withholding Request, to the Social Security Administration (SSA). On Form W-4V, you can choose to have federal income tax withheld at specific percentages: 7%, 10%, 12%, or 22% of each payment. This allows recipients to have taxes taken out throughout the year, potentially avoiding a large tax bill at filing time. The completed Form W-4V should be sent or given to your local SSA office, not to the IRS.

State-Level Taxation

Beyond federal taxes, the taxation of Social Security benefits can vary significantly at the state level. While many states do not tax Social Security benefits, a notable minority does. As of the 2025 tax year, nine states tax some or all of their residents’ Social Security benefits: Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont, and West Virginia.

The rules in these states differ widely, often incorporating their own income thresholds, deductions, or exemptions. For example, some states may exempt benefits based on adjusted gross income (AGI) levels or age. West Virginia, for instance, has begun a phase-out program to eliminate its tax on Social Security benefits by 2026, with a significant portion already exempt for 2025. Given the variability of state tax laws, which can also change periodically, it is prudent for recipients to consult their specific state’s tax department or a qualified local tax professional to understand their precise state tax obligations regarding Social Security Disability benefits.