Received SSDI This Week: Receiving Social Security Disability Insurance (SSDI) can feel like a much-needed financial relief after navigating a long application and approval process. But just when you think you can take a breather, you might find yourself facing an unexpected question: “Do I owe taxes on my SSDI benefits?” The short answer? Maybe. While SSDI is a lifeline for millions of Americans, it’s not always tax-free. Whether or not you owe federal or state taxes depends on your total income, filing status, and where you live. Let’s break it down.
Received SSDI This Week
| Topic | Summary |
|---|---|
| Federal Taxation of SSDI | SSDI is taxable if your combined income exceeds certain thresholds ($25,000 for individuals, $32,000 for married couples). |
| State Taxation | 11 states currently tax SSDI benefits in some form. |
| States That Tax SSDI | CO, CT, KS, MN, MT, NM, RI, UT, VT, WV (phasing out), and sometimes MO and NE. |
| Income Thresholds | Vary by state; many offer partial or full exemptions based on income. |
| Useful Resource | Social Security Benefits Tax Info – IRS.gov |
Receiving SSDI is a major step toward financial stability when facing a disability. But don’t let tax season catch you off guard. By understanding the federal and state rules and knowing your income thresholds, you can plan ahead, avoid surprises, and even lower your tax burden. Make it a habit to review your financial situation each year and consult with a tax advisor familiar with disability benefits. With the right guidance, you can keep more of what you’ve earned.
What is SSDI?
Social Security Disability Insurance (SSDI) is a federal program that provides monthly payments to people who are no longer able to work due to a qualifying disability. It’s funded through payroll taxes, which means you’re eligible only if you’ve worked long enough and paid Social Security taxes. Think of it like insurance: you pay in while you’re working, and if you become disabled, SSDI pays you back.
Federal Taxation of SSDI
You might be surprised to learn that SSDI is taxable at the federal level in certain cases. The IRS uses a formula called combined income:
Combined Income = Adjusted Gross Income (AGI) + Nontaxable Interest + 50% of your SSDI benefits Depending on how this total stacks up, part of your SSDI benefits may be taxed:
Taxable Thresholds
- Single, Head of Household, or Qualifying Widow(er):
- Income > $25,000: Up to 50% of SSDI taxable
- Income > $34,000: Up to 85% taxable
- Married Filing Jointly:
- Income > $32,000: Up to 50% of SSDI taxable
- Income > $44,000: Up to 85% taxable
If you earn below these thresholds, your SSDI benefits are tax-free. Sources: TurboTax, H&R Block
State Taxation of SSDI
Most states follow the federal government’s lead and do not tax SSDI. But a handful of states have their own rules, and things can get a bit tricky.
States That Tax SSDI
As of 2025, the following states may tax your SSDI benefits:
Colorado
- Partial deductions depending on age.
- Full deduction for residents aged 65+.
Connecticut
- 100% exemption if AGI < $75,000 (single) or $100,000 (joint).
- Partial exemption above those limits.
Kansas
- Taxes SSDI for AGI > $75,000.
Minnesota
- Offers partial exemption based on AGI and filing status.
Montana
- Taxes SSDI above $25,000 (single) / $32,000 (married).
New Mexico
- Exempts SSDI for AGI < $100,000 (single) or $150,000 (joint).
Rhode Island
- Exemptions based on age/income.
Utah
- Offers a nonrefundable credit to offset taxes on SSDI.
Vermont
- Taxes SSDI above $60,000 (single) / $75,000 (joint).
West Virginia
- Phasing out SSDI taxes; full exemption expected by 2026. Sources: NerdWallet, Bankrate
Received SSDI This Week: How to Determine If You Owe Taxes?
Here’s a simple guide:
Step 1: Calculate Your Combined Income
- Add half of your SSDI to your other income.
Step 2: Compare It to Federal Thresholds
- Use the IRS tool: IRS Taxable Benefits Tool
Step 3: Check Your State’s Rules
- Visit your state’s Department of Revenue website or call a tax pro.
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FAQs on Received SSDI This Week
Do children receiving SSDI owe taxes?
No. If the SSDI benefits are for a dependent child and the child has little or no other income, they are not taxed.
Will I receive a 1099 form?
Yes. The SSA-1099 form will show the total amount of benefits you received for the year.
Can I reduce my tax liability?
Yes. Use deductions, credits, and tax planning. A tax advisor can help.
Are SSI and SSDI taxed the same?
No. Supplemental Security Income (SSI) is not taxable.
