Money sitting on top of a W4 form.

They say that only two things in this world are forever: death and taxes. But when it comes to Social Security Disability benefits, that may not necessarily be true. Technically, you still have taxes to worry about. But the circumstances around your disability benefits may actually make it, so you don’t need to file taxes.

However, this depends on several factors. The largest factor is whether or not you are pulling a paycheck in addition to your disability benefits, as this additional money could make it so you must file. We’ll discuss this in more detail when we examine whether disability benefits are taxable.

While some people receiving disability benefits won’t need to file for taxes, we’ll explore the circumstances that allow you to skip this step. However, even if you can skip filing your taxes, avoiding filing might not be in your best interest. We’ll explore this further, then close out our discussion by seeing if you need to be worried about the SSA withholding your taxes.

Are My Disability Benefits Taxable?

If you are single and your disability benefits are your only source of income, then you almost certainly will not have to worry about your disability benefits being taxable. For one thing, Supplemental Security Income (SSI) is approved on a by-need basis, which means that if you are on SSI, then you certainly don’t need to worry about your benefits being taxable.

If you have continued to work or are married and your spouse works, then you may earn enough income to be taxed. Marital status is often the key element in determining whether you need to worry about taxes.

Your disability benefits are not taxable in the following situations:

  • As a single individual, you make less than $25,000 in a year.
  • As a married couple, you make less than $32,000 in a year.

If your yearly income is less than $25,000 or $32,000, you won’t need to worry about your benefits being taxed. However, this isn’t to say you don’t have to file your taxes. If you earn a paycheck separate from your disability benefits, then you should expect to file your taxes like usual. But you shouldn’t need to worry about paying taxes on your disability benefits.

If your income is above those numbers, however, then your benefits will be taxable. 50% of your benefits are taxable if your yearly income is less than $44,000. If you make more than $44,000, then 85% of your benefits are taxable.

When Can I Get Around Having to File My Taxes?

If filing your taxes is something that you want to avoid, there aren’t a lot of options available. Most people, in most situations, are going to need to file their taxes; otherwise, they could find themselves in some pretty frustrating trouble. However, you may be able to avoid filing your taxes since you are on disability benefits.

If your only source of income is your disability benefits, then you may not have to file your taxes. Of course, this assumes that you are single. If you are married, it is recommended that you file your taxes jointly with your spouse. This is one of those situations where it is very easy to describe what it is like for a single, non-working person, but it gets much more complicated once additional people or incomes are added to the equation. If you are unsure whether or not you can get away without filing your taxes, you should speak to a professional beforehand. It is always better to be safe and sure than to act rashly and face the consequences for it.

Assuming that you are single and that your only source of income is your disability benefits, you still may want to consider filing your taxes anyway. While it is possible for you to get around them because of your situation, it might not be in your best interest. Stimulus payments would be a good example of this. If you are currently in a low-income bracket, then a stimulus payment could be a great boon. But if you still need to file your taxes, then you may not receive a stimulus payment because they need paperwork that they never received.

In this case, your choice not to file your taxes has had a negative impact. However, this is not a punishment or a penalty in the legal sense. It is more akin to forgetting to sign up for something and thereby missing out on it than a punishment.

Will the SSA Withhold My Taxes?

The SSA will not automatically withhold taxes from your disability benefit payments. However, they will do so if you ask them to. If you don’t make enough money in a year for your disability benefits to be taxable, then there is no reason you would ever ask them to do so.

But if you make enough that your benefits are taxed, then you may find that it is easier for you to juggle your tax responsibilities by just having the SSA withhold the tax in the first place. For some people, this is a horrible idea. But for others, it is a quick way to simplify their financial responsibilities.

Since they don’t withhold taxes automatically, you will need to request them to do so with a W-4V form. a Voluntary Withholding Request, you can find these online or ask your attorney for assistance in filling one out.

What Should I Do If I Run Into Issues?

You would think that getting disability benefits up and running, and tackling the various issues, such as additional confusion around taxes, should be easy. Unfortunately, the process is always much more complicated than it should be, and it can quickly leave you frustrated.

If you are having trouble with Social Security Disability Benefits, then you should work with an experienced attorney. It is their job to understand these systems, so they can deal with the frustrating parts on your behalf.

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