“Thought for the Day” #686 – by Stephen R. Elville, J.D., LL.M.

March 16, 2016

Are Social Security Disability benefits taxed? To determine when the SSDI recipient should pay taxes on his or her benefits, the IRS adds one-half of a beneficiary’s yearly SSDI award to his or her adjusted gross income (including tax-exempt interest payments). This figure is compared to a “base amount,” and if it exceeds that base, then some of the beneficiary’s SSDI award will be taxed. For single people, or married people filing separately who have lived apart for the entire year, the base amount is $25,000. Married couples filing jointly have a base amount of $32,000, and a married person who is filing separately but lived with their spouse for even a limited time has a base amount of $0 (this is not a misprint). How much of the SSDI award will be taxed? We will address that question in tomorrow’s blog.