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Are SSDI benefits taxed?

On Behalf of | Oct 21, 2021 | SSD - Social Security Disability Process And Benefits |

Taxes are a significant concern to most people. Even if individuals do not have a job due to a disabling condition, they may wonder whether they will have to pay taxes on the Social Security disability benefits they receive. Unfortunately, because seemingly no tax situation is simple, the answer to whether someone will be taxed for their SSDI benefits is that it depends. 

In particular, whether individuals’ benefits will be taxed depends on the state in which they live. While the majority of states do not tax SSDI benefits, over a dozen states do, including Minnesota. Of course, as with most situations, the exact stipulations for taxing these benefits can vary from state to state, so it is wise to obtain state-specific information on such taxation. 

Additionally, when it comes to federal taxes, the IRS sets an amount of income after which benefits recipients will face taxation, such as the following circumstances: 

  • If a person is single and has a total income below $25,000, their benefits will not be taxed. 
  • If a person is married and filing taxes jointly with a spouse, benefits will not be taxed if the couple make less than a combined $32,000. 

Unfortunately, many matters relating to SSDI benefits are complicated. As a result, it is often wise for concerned parties to ensure that they receive applicable and accurate information regarding their specific circumstances. To address a particular issue in Minnesota, whether relating to benefits taxation or other SSDI matters, discussing the topic with experienced legal professionals may prove useful. 

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