Taxes and Your Disability Benefits Part III: SSDI

Mar 13, 2015 | WC & Other Laws

Taxes and Your Disability Benefits Part III – Many people who work with Denver disability lawyers and Denver disability attorneys end up receiving Social Security Disability (or SSDI) benefits. Social Security Disability benefits are usually awarded to individuals with an impairment that directly causes serious functional limitations. As with any income during tax season, people begin to wonder if the money is taxable.

In general, Social Security Benefits are not subject to taxes. People who have an income in addition to disability benefits and people who do not have the additional income alike do not generally have to pay taxes on their Social Security Disability benefits. However, for people who have a substantial other source of income or have a spouse who does, the federal government may tax the SSDI benefits.

Related: Taxes and Your Disability Benefits Part II: Supplemental Security Income

The reason some SSDI benefits may be taxable is that there is a specific baseline that an individual’s income cannot go over for disability benefits to remain tax-free. Denver disability lawyers have a good background in this concept. If an individual who receives SSDI benefits has a spouse, the baseline extends a little higher, but not by much. Based on how much an individual or a married person collecting SSDI benefits makes, a particular percentage of the benefits could be taxed. Luckily, most state taxes don’t include disability benefits in general, so even if a person receiving SSDI benefits has to pay taxes on a federal level, the state level does not usually take anything.

Additional Resources for Taxes and Your Disability Benefits:

Taxes and Your Disability Benefits Part I: Workers’ Compensation

Taxes and Your Disability Benefits Part II: Supplemental Security Income

Top Things to Know About Taxes and Workers’ Compensation Benefits

Workers’ Compensation can be difficult, confusing, and very complex. Kaplan Morrell has helped thousands of injured workers since 1997 get the benefits they deserve. Contact us here or call us at 303-780-7329 for your free consultation.

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