Do I have to file taxes on Social Security Disability Insurance?
Social Security Disability Insurance (SSDI) from the Social Security Administration (SSA) are subject to Federal tax in limited cases. If you are married and file jointly, you and your spouse pay no tax on combined income below $32,000 per year—including half your SSDI benefits. Above this, a portion of SSDI benefits is subject to Federal tax. Most states exempt SSDI benefits. Since taxation of SSDI benefits is complicated and can vary, it is wise to consult an accountant—especially in the first benefit year.
At what age do I stop paying taxes on Social Security Disability Insurance?
Some Social Security Disability Insurance (SSDI) issued by the Social Security Administration (SSA) are subject to taxation. However, SSDI recipients with no other income do not pay tax. Unlike Supplemental Security Income—on which a recipient pays no tax after retirement age—there is currently no age-related cutoff to determine if SSDI benefits are subject to tax. Since taxation of SSDI benefits is complicated and can vary, it is wise to consult an accountant—especially in the first benefit year.
Will I receive a 1099 for Social Security Disability Insurance?
Even though Social Security Disability Insurance (SSDI) are not subject to taxation for approximately two-thirds of beneficiaries, the Social Security Administration (SSA) will still issue a form SSA-1099 to everyone who received SSDI benefits in a given tax year. Form SSA-1099 will indicate exactly how much money a beneficiary has received in SSDI benefits from SSA in that year. SSDI recipients should always retain Form SSA-1099 for when they file their federal and state income tax returns.