Do You Know How to Report SSA Disability Benefits at Tax Time?

Here we are in tax season again. It seems like the last one just ended! In 2011, around 8.6 million disabled Americans received SSA disability benefits and will have to file their taxes correctly.

Filing Your Taxes Correctly

Are you reporting the correct SSA disability information when you file your taxes? According to the “Marketwire” report from The Wall Street Journal, you need to be aware of how to report your SSDI income.

Paul Gada, an Allsup tax attorney, offers valuable information. “It can take months and sometimes years to receive Social Security disability benefits. So, many people receive a one-time, lump-sum amount that includes back payments. One of the most frequent questions we receive from claimants at this time of year is whether SSDI benefits are taxable and how to report lump-sum payments on their tax return.”

In order to help severely disabled Americans who receive SSDI benefits, Gada offers several important pieces of advice for tax time:

  • Up to 50% of your SSA disability benefits are taxable; a formula determines exactly what percentage to claim. 
  • For the tax year 2011, you must file a federal income tax if your gross income is $19,000 for couples or $9,550 for individuals.
  • Most people receiving SSA disability will not owe taxes. The problem comes in if you receive and report all of a lump sum benefit.
  • You are not required to report all of a lump sum benefit in one tax year. In fact, you can spread the payment over previous tax years, while only filing once in the current year.
  • There are tax credits available to SSA disability beneficiaries. And, even if your income was low enough not to file, you could receive a refund if you do.
  • There are tax credits for people with disabilities. 
  • There are tax credits for people who pay for the care of a dependent or spouse. 

Contact Keefe Disability Law

While the disability attorneys at Keefe Disability Law do not file tax returns for you, we can discuss your situation with you and help you with filing an SSA disability application. Call us toll free to find out more at 888-904-6847.

John L. Keefe
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Founding Attorney, Massachusetts Social Security Disability Lawyer
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