Is SSDI Taxable in Florida? State and Federal Taxes
Florida has no state income tax, but your Social Security Disability benefits may still be taxable depending on your overall income level.
Social Security Disability Insurance, or SSDI, provides a source of income to individuals who are unable to work due to a significant disability. The tax treatment of SSDI is determined at both the federal and state levels. For residents of Florida, the primary consideration is federal tax law, as the state’s own tax structure simplifies the issue.
Federal Taxation of SSDI Benefits
The Internal Revenue Service (IRS) may tax a portion of your SSDI benefits, but this depends entirely on your total income. The figure used is your “combined income.” To calculate this, you take your Adjusted Gross Income (AGI), add any nontaxable interest you received, and then add 50% of the total Social Security benefits you received for the year.
These income thresholds vary based on your tax filing status. For an individual filing as single, head of household, or a qualifying widow(er), if your combined income is between $25,000 and $34,000, you may have to pay income tax on up to 50% of your SSDI benefits. If your combined income exceeds $34,000, that taxable portion can increase to up to 85% of your benefits. Below the $25,000 threshold, your benefits are not subject to federal income tax.
For those who are married and file a joint tax return, if your combined income as a couple is between $32,000 and $44,000, up to 50% of your SSDI benefits could be taxable. For joint filers with a combined income of more than $44,000, up to 85% of the benefits may be taxed. You will never pay taxes on more than 85% of your total Social Security benefits, regardless of how high your income is.
Florida State Taxation of SSDI Benefits
Florida is one of several states that does not have a personal income tax. This constitutional prohibition means the state government does not tax any form of individual income, whether it comes from wages, investments, or federal programs. This rule applies universally to all Florida residents receiving these benefits.
It does not matter what your total income is or whether a portion of your benefits is taxed by the federal government. The federal rules regarding combined income and the 50% or 85% taxable thresholds have no bearing on your Florida tax situation, as there is simply no state mechanism to tax this income.