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Paying taxes on Social Security Disability benefits

On Behalf of | Jul 17, 2021 | social security disability

California individuals who are unable to work due to a medical condition or mental impairment could be eligible for certain types of financial support from the Social Security Administration. The SSA offers Social Security disability benefits to qualified individuals, but it is beneficial to know what this could mean for one’s finances and financial obligations. For example, will a disability benefits recipient have to pay taxes on that money? 

What to know before applying 

It is possible that a recipient could pay taxes on the benefits he or she is getting from the SSA, depending on the specific program. For example, benefits from the Supplemental Security Income program are not subject to income tax. However, benefits from the Social Security Disability Insurance program could be taxable based on the recipient’s provisional income.  

Provisional income is based on the sum of one’s tax-exempt interest income, adjusted gross income and half of any Social Security disability income. A recipient can calculate potential taxes by using the Internal Revenue Service’s tool on its website. It may be helpful to note that most disabled beneficiaries are not required to pay taxes on their Social Security disability benefits. 

Information from a reliable source 

Applying for disability benefits can be a complex process for a disabled California adult. It may be helpful to work with an experienced attorney as one navigates the application stage and potential appeals that may be necessary. A knowledgeable legal ally can also provide one with reliable information regarding how disability benefits could impact life after approval.