OWM Blog – Do You Pay Income Tax on Social Security Disability Benefits?

do you pay income tax on social security disability benefits

People often wonder: “Do you pay income tax on social security disability benefits?”

The answer is “no” and “yes.”  Private disability policies that you may have through your employment or you have purchased personally are not subject to Federal income tax due to the fact that they are purchased with after-tax dollars.

Social Security Disability is subject to Federal income tax.  Many of us grew up thinking otherwise.  Effective with the tax year 1984, all Social Security benefits became subject to Federal income tax, although it only impacts individuals who have substantial income in addition to the Social Security Benefits.

If a person files Federal income tax as an individual with total income, including Social Security, between $35,000 and $43,000, that individual may pay income tax on up to 50% of the Social Security benefits received.  For any individual filing with combined income above $35,000, up to eighty-five percent (85%) of the Social Security benefits may be taxable.

For a married couple filing jointly with a combined income between $32,000 and $44,000, income tax may be paid on up to fifty percent (50%) of the Social Security benefits.  Above $44,000, the percentage of Social Security Benefits subject to tax increases to eighty-five percent (85%).

For additional reference, go to https://www.ssa.gov/planners/taxes.html.

Pennsylvania does not tax Social Security disability or retirement income benefits.  A minority of states do impose some taxes on Social Security payments.

— Written by David S. Kaplan, Esq.

DISCLAIMER: The contents of this blog are not legal advice, and are not to be used for that purpose.  If you are faced with a legal matter, you should contact a lawyer immediately in order to ensure that you are protected.