Why am I not being penalized for not paying federal taxes for my SSDI (SSA-1099)? It looks like I can expect a refund this year and I just wanted to check.

[micjord00]

I am on SSDI and on my SSA 1099 box 6, it reflects I have not had any taxes withheld for 2017. This is accurate, but I thought I have always been penalized for not having taxes taken out. This is the first year since I have been on SSDI that it reflects a refund. I just wanted to ensure this was accurate before I filed electronically with the IRS.

[Vanessa]

Do you have any other source of income?

[micjord00]

I worked for 3-months, but it was not a lot of money.

[Vanessa]

Did you have taxes withheld on what you made?

[micjord00]

yes

[Vanessa]

Is it equal to what you are getting back as a refund?

[micjord00]

No. I am expecting a refund of over $3K. It just made me a little nervous.

[Vanessa]

DId you enter your 1099SSA as a W2 by any chance?  How much did you earn in wages?

[micjord00]

No. I entered it under the next section as a form of income. When I worked, I made $1808 when I worked last year and just over $30K on disability.

[SweetieJean]

Did you enter the SSA-1099 in the correct location?

[micjord00]

yes. It was in the income section after the W-2 submissions.

[Vanessa]

See answer below, if that is not where you entered it, then that is why you are getting a refund.  From what you are explaining, your refund is too high

[Vanessa]

The one other error that could be is a type in your W2, so you should recheck all of those entries

[SweetieJean]

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[Vanessa · Accepted solution]

SSDI is not fully taxable, so depending on your other income, anywhere between 0%-85% may be taxable. Based on the information you are providing, it appears you have entered the SSDI in the wrong location and need to move it. If the amount of your other income was minimal, then it is likely you have no taxable income so you would only get a refund of anything paid in during the period you were working and earning wages.  

To enter SSDI do the following:

1. Click Federal
2. Income and Expenses
3.  Scroll down to Retirement Plans and Social Security and click Show More
4. Click Start next to Social Security
5. Click Yes, let's work on Social Security Benefits
6. Follow the prompts to enter your SSA-1099

Then you will need to click on Income and Expenses again and scroll down to where you entered the income as Other Income and delete it.  

To find out whether any of your benefits may be taxable, compare the base amount for your filing status with the total of:

• One-half of your benefits; plus
• All of your other income, including tax-exempt interest.

The base amount for your filing status is:

• $25,000 if you're single, head of household, or qualifying widow(er),
• $25,000 if you're married filing separately and lived apart from your spouse for the entire year,
• $32,000 if you're married filing jointly,
• $0 if you're married filing separately and lived with your spouse at any time during the tax year.

https://www.irs.gov/faqs/social-security-income/regular-disability-benefits/regular-disability-benef...