Taxing Disability Benefits: What You Might Owe for SSA Disability Benefits and/or Private Disability Benefits

By Disability Group

You have started receiving your Social Security disability benefits, and perhaps benefits from a private insurance policy.  Are your benefits taxable?  How much is taxable?  If you have to repay your benefits to a private insurance carrier, how will that be counted?

Are Your Benefits Taxable?

                If your earnings – including your benefits – are beyond a calculated base amount, then a portion of your Social Security disability benefits will be taxed.  The base amount takes into consideration all the forms of income that you are receiving and may be calculated by filling out the IRS’ Social Security and Equivalent Railroad Retirement Benefits Form 915The following base amounts can be used as a “quick determination” to see if your benefits are taxable:

  • $25,000 if you are single, the head of household, or a qualifying widow or widower with a dependent child.
  • $25,000 if you are married but filing separately and did not live with your spouse at any time during the tax year.
  • $32,000 if you are married and filing jointly with your spouse.
  • $0 if you are married but filing separately and lived with your spouse at any time during the tax year.

Any amount above the base amounts for each category will be taxable by the IRS.  Even if none of your benefits are taxable, however, you must still file your taxes!

How Much Is Taxable?

                Generally, up to 50% of your benefits will be taxable.  This will vary based on how much you earned in the tax year.  However, up to 85% of your benefits may be taxable if either of the following applies to you:

  • All of your earnings plus half of your benefits total more than $34,000 (or $44,000 if you are married and filing jointly).
  • You are married but filing separately and lived with your spouse at any time during the tax year.

Repayment to Private Insurance Carriers and Other Deductions

                You may have received any private disability payments from an employer or insurance company, and used your SSA lump-sum payment to repay them.  If so, you can take an itemized deduction so long as the repayment was not more than $3,000.  If it was over $3,000, you may be able to claim a tax credit instead.

                Additionally, you may also be able to deduct certain legal expenses.  Expenses incurred in connection with the determination, collection, or refund of any tax, and in certain other tax-related circumstances, might be deductable.

                For more information, speak to your representative or refer to Form 915 for additional details and specific examples.


Disability Group Inc.
Disability Group Inc was founded on the principles of dignity and respect. We are a national law firm focused exclusively on helping people receive the Social Security Disability benefits they deserve. For more information about Social Security, or to see if you qualify for benefits, visit us at