By Michelle Shvarts
Principal Attorney

At Disability Advocates Group, we understand the financial challenges faced by individuals living with disabilities. Many of our clients rely on Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) to cover essential expenses. But a common question that arises is: are these benefits taxable? The answer, like many things with taxes, depends on your specific situation. Let’s break down the basics of how taxes impact your disability benefits.

General Benefit Amounts:

  • SSDI: The amount you receive through SSDI is based on your average covered earnings before becoming disabled. The national average monthly SSDI benefit in 2024 is around $1,400, but this can vary depending on your work history.
  • SSI: SSI is a needs-based program with a fixed federal benefit rate. As of 2024, the maximum federal benefit amount for an individual is approximately $914 per month. Some states supplement this amount.

Why the Difference?

SSDI is like a form of social insurance. You pay Social Security taxes while you work, and these contributions go towards funding future disability benefits. SSI, on the other hand, is a welfare program funded through general tax revenue and intended to help low-income individuals with disabilities who have limited work history.

Taxation of Benefits:

  • SSDI: Generally, up to half of your SSDI benefits may be taxable depending on your total income. This means if your income from other sources (wages, pensions, etc.) combined with half your SSDI benefits falls below a certain threshold, you won’t owe taxes on your benefits. These thresholds are adjusted annually and vary depending on your filing status (single, married filing jointly, etc.).
  • SSI: SSI benefits are not considered taxable income.

Why the Difference in Taxation?

Since SSDI benefits are essentially a form of income replacement, the government may tax a portion depending on your overall income level. SSI, being a needs-based program, is not considered taxable to ensure essential support for low-income individuals with disabilities.

Factors Affecting Taxation:

  • Total Income: As mentioned earlier, the combined amount of your SSDI benefits, wages, pensions, and other income sources determines if any portion of your SSDI will be taxed.
  • Filing Status: Your tax filing status (single, married filing jointly, etc.) affects the thresholds used to determine if your benefits are taxable.
  • State and Local Taxes: While federal SSI benefits are not taxed, some states may have additional taxes that could impact your overall income.

Contact Our Florida Disability Attorney Today

Disability Advocates Group is here to help you navigate the legal and financial complexities associated with your disability. Contact us today if you have questions about SSDI or SSI benefits or need assistance with your disability claim.

It’s Important to Note

This blog is for informational purposes only and should not be considered tax advice. The tax implications of your disability benefits can be complex. Here at Disability Advocates Group, we recommend consulting with a tax professional for personalized guidance on your specific situation. They can help you determine if any portion of your benefits will be taxed and ensure you’re filing your taxes correctly.

About the Author
Ms. Shvarts and the rest of the team at Disability Advocates Group are dedicated to assisting individuals in Florida obtain Social Security Disability Benefits (SSDI) and Supplemental Security Income (SSI) benefits.