Yes, you can get a tax refund while receiving disability benefits, but whether you owe taxes depends on your total income and filing status

Receiving Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) does not automatically mean you are exempt from filing taxes or from owing taxes. The IRS treats disability benefits differently depending on which program you receive and what other income you have. If you have earned income from work, investment income, or other sources alongside your disability payments, you may owe federal income tax—and you may also be owed a refund if too much was withheld.

The key question is whether your total income crosses the threshold that requires you to file. For 2024, a single person with only SSDI income generally does not have to file unless they also have other income. But the moment you add wages, self-employment income, or substantial interest and dividends, the math changes. Many people receiving disability benefits do not realize they have refundable credits available—like the Earned Income Tax Credit (EITC)—that can result in a refund even if no tax was withheld.

Key Takeaways

  • SSDI benefits are not taxable on their own, but if your total income (including SSDI plus other earnings) exceeds a certain threshold, up to 85 percent of your benefits may become taxable.
  • SSI benefits are never taxable, but you still may owe tax on other income you received during the year.
  • You can claim the Earned Income Tax Credit (EITC) if you have work income, even while receiving disability benefits, and this credit often results in a refund.
  • The IRS Form SSA-1099 shows your SSDI income; you will receive this in January if any of your benefits are taxable.
  • Filing a tax return even when not required can result in a refund if you had taxes withheld from wages or are may have access to to refundable credits.

How SSDI and SSI are treated differently for tax purposes

SSDI benefits may be taxable depending on your "combined income," which is calculated as your adjusted gross income plus nontaxable interest plus half of your SSDI benefits. If this combined income exceeds $25,000 (single filer) or $32,000 (married filing jointly), up to 85 percent of your SSDI benefits become subject to federal income tax. This is a real tax liability, not a penalty—you owe it to the IRS just like any other income tax.

SSI benefits are never taxable, period. The IRS does not count SSI as income for tax purposes. However, if you receive SSI and also have wages or other income, you still file a tax return based on that other income alone. Many SSI recipients do not realize they can claim the EITC based on their work earnings, which can generate a substantial refund.

The IRS sends Form SSA-1099 in January if any of your SSDI benefits are taxable that year. You will not receive this form if your benefits are not taxable or if you receive only SSI. Keep this form with your tax records; you will need it to file your return accurately.

When you have work income alongside disability benefits

If you work while receiving SSDI, your situation becomes more complex because you now have two separate tax issues: whether your SSDI is taxable (based on combined income), and whether you owe tax on your wages. Many people in this position are surprised to learn they can claim the EITC, which is a refundable credit designed for people with low to moderate work income.

The EITC can be worth hundreds or thousands of dollars, and because it is refundable, you receive the full amount even if you owe no tax. For example, if you earned $15,000 in wages and received $10,000 in SSDI, your combined income might trigger some SSDI taxation, but your EITC could still be $2,000 or more—resulting in a net refund even after accounting for any tax owed on the SSDI portion.

To claim the EITC, you must file a tax return. This is one of the most common reasons a person receiving disability benefits ends up with a refund: they file to claim the credit, and the refund arrives weeks later. You do not need to have had taxes withheld from your wages to claim the EITC; the credit stands on its own.

Filing requirements and thresholds for disability recipients

The IRS sets different filing thresholds depending on your age and filing status. For 2024, a single person under 65 with only SSDI income generally does not have to file unless their combined income exceeds $14,600. However, this threshold is much lower if you have any other income—even $1 of wages can push you over the threshold if your SSDI is also taxable.

A practical rule: if you have any earned income (wages or self-employment), file a return. The cost of not filing when you should is far higher than the cost of filing when you are unsure. If you file and discover you owe nothing, you owe nothing. But if you do not file and you were may have access to to a refund or the EITC, that money stays with the IRS.

You can file your return using IRS Free File if your income is below a certain threshold (which varies by year), or you can use a tax software or a tax preparer. Many disability recipients may have access to for free tax preparation through VITA (Volunteer Income Tax Assistance) sites in their area, which you can find on the IRS website.

How to report disability income on your tax return

When you file, you will report your SSDI on line 5b of Form 1040 (the main federal tax form). The amount you report comes from your Form SSA-1099. If part of your SSDI is taxable, you calculate the taxable portion using a worksheet in the Form 1040 instructions—this is not something you guess at.

If you received SSI, you do not report it anywhere on your return; it is not income for tax purposes. You only report other income you had, such as wages (on line 1a), interest (on line 2b), or self-employment income (on Schedule C or Schedule C-EZ).

Many people make mistakes on this part of the return because the rules are counterintuitive. If you are unsure whether your SSDI is taxable or how much to report, a tax preparer or VITA volunteer can walk you through it. The IRS also publishes Publication 915, which explains SSDI taxation in detail.

Tracking your refund after you file

Once you file your return, you can track your refund using the IRS "Where's My Refund?" tool on IRS.gov. You will need your Social Security number, filing status, and the exact refund amount from your return. The tool updates once per day, usually overnight.

Refunds typically arrive within 21 days of the IRS accepting your return if you file electronically and choose direct deposit. If you file by mail, add an extra two to three weeks. If you claim the EITC, the IRS may hold your refund until mid-February as part of the EITC compliance process, even if you file in January.

If your refund does not arrive within the expected timeframe, check the "Where's My Refund?" tool first. If the tool shows your return was accepted but the refund has not been issued, wait a few more days. If the tool shows an error or if more than 21 days have passed since acceptance with no refund, contact the IRS at 1-800-829-1040.

What to do if you owe tax instead of receiving a refund

If your SSDI is taxable and your combined income is high enough, you may owe tax rather than receive a refund. The IRS does not automatically withhold tax from SSDI payments, so you may need to make estimated tax payments or adjust your withholding if you have other income (like wages).

If you discover you owe tax, you can pay the IRS online through IRS.gov, by mail, or by phone. If you cannot pay in full, the IRS offers payment plans. You can set up a short-term plan (120 days or less) at no cost, or a long-term installment agreement (which does have a setup fee). The sooner you contact the IRS or file your return, the more options you have.

To avoid owing a large amount next year, you can request that the IRS withhold tax from your SSDI. Contact your local Social Security office or call 1-800-772-1213 to ask about withholding. You can also increase withholding from any wages you earn by adjusting your W-4 with your employer.

Frequently Asked Questions

Do I have to file a tax return if I only receive SSDI and no other income?

Only if your combined income exceeds the filing threshold for your age and status. For 2024, a single person under 65 with only SSDI generally does not have to file unless combined income exceeds $14,600. However, filing anyway can result in a refund if you had taxes withheld from other sources or are may have access to to refundable credits.

Can I claim the Earned Income Tax Credit while receiving disability benefits?

Yes, if you have work income. The EITC is based on your earned income, not your disability status. Many people receiving SSDI or SSI can claim the EITC if they worked during the year, and this credit often results in a refund of several hundred to several thousand dollars.

What if I received both SSDI and SSI in the same year?

Report only the SSDI on your tax return; SSI is never taxable. Your combined income for determining whether SSDI is taxable includes the SSI you received, but you do not report the SSI itself as income. This can make the calculation tricky—a tax preparer can help.

Will receiving a tax refund affect my SSI or SSDI benefits?

A tax refund does not count as income for SSI purposes if you spend it in the month you receive it. For SSDI, a refund does not affect your benefits at all. However, if you receive a large refund and deposit it into a savings account, SSI has resource limits that could be affected if your savings exceed $2,000 (for an individual).

What if I did not receive a Form SSA-1099 but think some of my SSDI should be taxable?

Contact Social Security at 1-800-772-1213 and request a replacement Form SSA-1099. If Social Security says your benefits are not taxable but you believe they should be based on your other income, consult a tax preparer or call the IRS at 1-800-829-1040 to discuss your situation.