March 2, 2009 • June Walbert
Q: I thank you for reading this. Is Social Security Disability taxable or is it exempt? Thanks.
-- Ralph
A: Good question. How about “maybe” as a definitive answer? Two types of government benefits include SSDI (social security disability insurance) and SSI (supplemental security income). SSDI provides income for the disabled while SSI may provide additional income for the disabled or elderly folks who demonstrate financial need. SSI is not taxable, but SSDI is taxable under the same rules as social security retirement. Check out IRS Publication 915 for more information.
So in a nutshell, if you don’t have any other income, your SSDI should not be taxable. However, if you do have income from other sources, such as investments, military retirement, part-time work, etc., taxes could be due. Basically, if half of your social security plus all of your other income is more than $25,000 (single) or $32,000 (married filing jointly), a portion of your benefits will be taxable.
About USAA
USAA or its affiliates do not provide tax advice. Taxpayers should seek advice based upon their own particular circumstances from an independent tax advisor. The information is provided for informational purposes only and is not intended to substitute for obtaining professional financial advice. Please thoroughly research and seek professional representation before acting on any information you may have found in this article. This article is in no way attempts to provide advice that relates all personal circumstances.
Examples given are hypothetical illustrations and not an indication of the benefits or features of any USAA product. You should seek policies and advice based upon your own particular circumstances. Sample loans are for illustration purposes only and are not a rate quote, pre-approval, or commitment to lend.
June Walbert is a CERTIFIED FINANCIAL PLANNER TM practitioner with USAA Financial Planning Services, one of the USAA family of companies.
USAA Financial Planning Services® refers to financial planning services and financial advice provided by USAA Financial Planning Services Insurance Agency, Inc. (known as USAA Financial Insurance Agency in California), a registered investment adviser and insurance agency and its wholly owned subsidiary, USAA Financial Advisors, Inc., a registered broker dealer.
Certified Financial Planner Board of Standards, Inc. owns the certification marks CFP® and Certified Financial Planner TM in the United States, which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.
USAA means United Services Automobile Association and its affiliates. Banking products provided by USAA Federal Savings Bank. Credit cards provided by USAA Savings Bank. Both Banks Member FDIC.
Comments