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UncategorizedIs Disability Income Taxable by the IRS? 

December 10, 2022

If you’re disabled and cannot work, you may qualify for disability. Beyond the approval process, there are a lot of questions that can arise from collecting disability benefits. Here’s one: Is the money you receive to support yourself taxable? You may wonder how your monthly disability benefits will affect your tax return. This post will answer your questions on how the IRS views your tax return if you’re disabled. 

Social Security Disability Lawyer in Nebraska and Iowa

Watson & Carroll, P.C., L.L.O.’s Social Security Disability team can help you secure benefits needed  to support yourself. Chellsie Weber, our wildly successful and experienced disability attorney, and Abby Reid, our wonderful and thorough disability paralegal, can offer support and advice as it pertains to your disability and the benefits approval process. Remember, you’re more likely to have a successful disability claim with an attorney by your side. Call us today at 402-991-2100. You also can share your story here.

Are Disability Benefits Taxable?

Social Security disability benefits may or may not be taxable. How they appear on your income tax return on how much other income you – and if married – your spouse – have in addition to your disability benefits. But, in general if your disability benefits are your only income, they are not taxable. 

If you are single and your disability is your only source of income, you do not necessarily have to file income taxes. But, in some situations, going ahead and filing a tax return could be in your best interest. As an example, if you do not file taxes, you may not receive stimulus payments or other rebates, or refunds sent out by the government. 

Earnings Before Required To File Taxes

None of your Social Security Disability Insurance (SSDI) is taxable if half of your SSDI plus all your other income is less than $25,000 if you file single, head of household or married filing separately – if you and your spouse always lived apart during the year – or $32,000 if filing jointly. 

However, filing your taxes can help you receive refunds even if your only income is disability. As an example, if you get disability retirement benefits before you reach the minimum retirement age, you should claim the benefits as earned income to qualify for the EITC. SSDI or SSI does not count as earned income, so you should seek the guidance of a tax professional before filing your taxes. 

To determine your minimum retirement age, check your retirement plan. The minimum retirement age is the earliest age that you could get retirement benefits if you were not legally disabled. After you have reached the minimum age of retirement, your disability benefits cannot count as earned income. 

Getting Guidance About Your Disability Benefits 

If you are receiving disability benefits, and you have questions about filing your taxes, speak with our experienced, compassionate and successful disability attorney at Watson and Carroll. The experienced attorneys at Watson and Carroll, P.C., L.L.O., have helped thousands of disabled workers get their disability claims on track and understand the tax requirements after being approved for disability. 


About Watson & Carroll 

Watson & Carroll, P.C., L.L.O., is not a high-volume law firm that only speaks with clients when it is absolutely necessary. For us, it’s personal. Our team works closely with our clients and their loved ones – not only so that we understand their challenges and concerns, but so we can tailor our approach to address those factors, aggressively pursue results, and secure peace of mind. Whether it is a medical malpractice case or advocating for disability benefits, we work to protect our clients and make sure their rights are upheld. 

Our firm can help. Call 402-991-2100 or email contact@watsoncarroll.com. You also can fill out our confidential contact form.

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