Disability benefits question

[sgluckadoo]

Can anyone answer this? I am going to begin receiving disability benefits and wonder how the monthly benefit is taxed. Is it only federal taxes or are state taxes also taken out? anyone who knows how this works, i would greatly appreciate your help. I will also be getting back pay. is that taxed?

[falcon9]

Can anyone answer this? I am going to begin receiving disability benefits and wonder how the monthly benefit is taxed. Is it only federal taxes or are state taxes also taken out? anyone who knows how this works, i would greatly appreciate your help. I will also be getting back pay. is that taxed?

That would depend upon a few variable factors. You might want to check the IRS website for more information.

"Because total income is limited for persons collecting Supplemental Security Income (SSI), it is the rare exception that a person collecting any portion of SSI benefits would owe income taxes. Persons receiving SSI benefits as their only source of income would not be taxed on that benefit.

However, some people who get Social Security Disability (SSD), or Social Security retirement, may have to pay income taxes on those benefits based on what other income they may be receiving. This will apply to you only if you have other substantial income in addition to your benefits (for example, wages, self-employment, interest, dividends, pension, taxable disability insurance benefits, and other taxable income that you have to report on your tax return).

Rather than provide a separate, lower tax table for Social Security benefits, the IRS provides a break by taxing only a portion of the Social Security benefits depending on the amount of other income. No one ever pays income taxes on more than 85 percent of his or her Social Security benefits and some pay on a smaller amount, based on these IRS rules:

If you file a federal tax return as an "individual" and your combined income* is between $25,000 and $34,000, you may have to pay income tax on 50 percent of your Social Security benefits.

If your combined income is above $34,000, up to 85 percent of your Social Security benefits is subject to income tax.

If you file a joint return:
You may have to pay taxes on 50 percent of your benefits if you and your spouse have a combined income* that is between $32,000 and $44,000.

If your combined income is more than $44,000, up to 85 percent of your Social Security benefits is subject to income tax.

If you are married and file a separate tax return, you probably will pay taxes on your benefits."

[sherryinutah]

Can anyone answer this? I am going to begin receiving disability benefits and wonder how the monthly benefit is taxed. Is it only federal taxes or are state taxes also taken out? anyone who knows how this works, i would greatly appreciate your help. I will also be getting back pay. is that taxed?

Usually SSI and SSDI are considered to be unearned income which means it isn't taxable income.  If that's the only income you have you wouldn't even file a tax return for that year.  I'm a representative payee for individuals who receive Social Security benefits so this information is based on my experience.  

You wouldn't necessarily want to rely on information posted in this forum but you would want to contact Social Security after you begin receiving back pay and benefits to ask about your specific situation.

[Gerianne]

I get Social Security (SSI) benefits for my disability. There are no taxes; the yearly wages aren't that high.

[hawkeye3210]

It all depends on what other income you have.  If you have no other income, than it is not going to be taxable.  If you have other income, depending on how much, some or all of that income may become taxable.

[premar16]

i have been on SSi and will be for awhile cause of spinal bifida and i have never done taxes on my payment

[sgluckadoo]

Can anyone answer this? I am going to begin receiving disability benefits and wonder how the monthly benefit is taxed. Is it only federal taxes or are state taxes also taken out? anyone who knows how this works, i would greatly appreciate your help. I will also be getting back pay. is that taxed?

Usually SSI and SSDI are considered to be unearned income which means it isn't taxable income.  If that's the only income you have you wouldn't even file a tax return for that year.  I'm a representative payee for individuals who receive Social Security benefits so this information is based on my experience.  

You wouldn't necessarily want to rely on information posted in this forum but you would want to contact Social Security after you begin receiving back pay and benefits to ask about your specific situation.



Thanks for the information. It is all so confusing. It is actually my husband who is disabled. I work full time (and lots of overtime) and make close to 60k, so I am guessing his disability pay will be taxed.

[sgluckadoo]

Thanks for the information. It is all so confusing. It is actually my husband who is disabled. I work full time (and lots of overtime) and make close to 60k, so I am guessing his disability pay will be taxed.

[falcon9]

It is all so confusing. It is actually my husband who is disabled. I work full time (and lots of overtime) and make close to 60k, so I am guessing his disability pay will be taxed.

Even if you normally file a joint return, the total gross income is taxable, (where SSI & SSDI aren't sepaarately considered as taxable income themselves).  The IRS has several publications regaarding such tax situations and these are available from the irs.gov website.

[inertia4]

To my knowledge, disability is not taxed. The only way that you pay tax on it is if you are already collecting a pension and the disability. Then you pay taxes. Other then that you do not pay tax on just disability.

[acurtsinger2]

no taxes come out, but you will have to eventually start paying monthly premium for medicare.  i get 900 a month, but after they take my medicare out i only get 750.   sucks

[mjdoug03]

I believe you still have to pay both.

[Linda67]

You probably will have to check with your state department of revenue to see about that part of your question.  Oregon doesn't tax social security but I don't know how other states that have a state income tax handle it.

[dmahoney]

I am on disability and my husband works so my ssd is taxed. My husband has extra taxes taken out of his check to cover my taxes. You can also contact ss. and request that taxes are held from your disablility. There is a form to fill out for that. Good luck.

[sgluckadoo]

I am on disability and my husband works so my ssd is taxed. My husband has extra taxes taken out of his check to cover my taxes. You can also contact ss. and request that taxes are held from your disablility. There is a form to fill out for that. Good luck.

Thanks for the information. I appreciate everyone's feedback!