Q. Do you have to file if you get Social security disability income (S.S.D.I.) funds below the $ 23,000 amount as the I.R.S. limit?
A. Yes, if you have sufficient other income.*
Q. DOES IT HELP RAISE YOUR EARNED INCOME ON AMOUNT OF S.S.D.I. AMOUNT?
A. No. SSDI is not classified as earned income. It is possible for the taxable portion of SSDI, if any, to lower you earned income credit (EIC). The earned income credit is first calculated (actually looked up in a table) on your earned income then it is calculated on your total income (AGI). You get the lesser of the two calculated EIC numbers.
*Social security only becomes taxable when added to sufficient other income. If you are otherwise required to file a tax return, you do need to enter it in TurboTax (TT). TT will determine the taxable portion.
Social security (including SSDI) becomes taxable when your income, including 1/2 your social security, reaches:
Married Filing Jointly(MFJ): $32,000
Single or head of household: $25,000
Married Filing Separately and lived with your spouse at any time during the tax year: $0
After TurboTax (TT) calculates the taxable portion of SS, it puts the total amount of SS on line 6a of form 1040 and the taxable amount on line 6b (2020-2). TT also produces a worksheet to show how the taxable amount is calculated. Although most people pay tax on 85% of their SS. it can be less for lower income taxpayers.
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