Tax Treatment of Social Security Disability Benefits

A recent article in USA Today stated that Social Security Disability benefits continue to provide vital support for people unable to work due to long-term illnesses or injuries. The system showcases a "time-honored expression of our nation's commitment to help care for those who must stop working due to illness or injury."

Those finding needed aid in this system should be aware that taxes may be required based on any received disability benefits.

Overview of Social Security Disability Benefits

Social Security Disability benefits are designed to assist those unable to work as a result of a medical condition that is expected to last at least one year. Benefits can continue, although may be subject to a periodic review, as long as the claimant cannot work.

This noble concept is a great way to help others, but studies show aid is much more tangible than most realize. It was recently found that a 20 year-old worker has a three in ten chance of becoming disabled before reaching retirement. As a result, the probability is high that these benefits will offer needed support to you or a loved one.

How Taxes Apply to Social Security Disability Benefits

Occasionally, people who receive Social Security are required to pay taxes on the benefits they receive. If your total income was supplied by social security, taxes will likely not apply. However, this is not the case if you made over $25,000 individually or $32,000 for those who are married filing jointly.

Taxes are calculated using the IRS provided Notice 703 form. Navigating through the social security disability system and required paperwork is difficult, and it is important to seek the counsel of an experienced social security disability attorney to ensure all legal options are reviewed and discussed.