If you receive Social Security disability benefits, you should be aware that they are taxable. However, many aren’t required to pay on them.
Social Security disability benefits are taxed, but those who have very little additional income usually don’t have to pay the tax. Statistically, those who do pay taxes on their Social Security Disability equal about one-third of those who receive the benefits. Regular Social Security Income is not taxed.
To determine if your Social Security Disability benefits, you can determine if it’ll be taxed by using the following base points. Married taxpayers who file a joint return will have a portion of their benefits taxed if they have more than $32,000 in annual income. Single taxpayers who make more than $25,000 annually will have a part of their benefits taxed.
The portion of your disability benefits that are taxed is determined by the amount of your income. The information below will help you determine which portion of your benefits will be taxed.
Single Filers
Monthly income Percentage of taxed benefits
0-$2,083 0%
$$2,084 – $2,833 50%
$2,834 + 85%
Married Filers
Monthly income Percentage of taxed benefits
0-$2,666 0%
$2,667 – $3,666 50%
$3,667 + 85%
The portion of your benefits that are subject to taxation are taxed at your marginal income tax rate. So, the amount you’d pay in taxes isn’t 50 or 80% of your benefits – it would range more around 10-15% of your benefits. Those who have higher incomes and 85% of their benefits subject to taxation may find their tax amount to be up to 35% of their benefits. You are subject to the same rate of taxation as other forms of income.
While a majority of the states do not tax disability benefits from Social Security, there are a few that do. These include:
- Connecticut
- Nebraska
- Colorado
- North Dakota
- Iowa
- Rhode Island
- Kansas
- Utah
- Montana
- Vermont
- Minnesota
- West Virginia
Of these states, some use similar income brackets to the federal government’s system listed above to determine the portion of benefits that are taxed. The remaining states that tax benefits have their own system.