Why is my disability taxable

[bronwyn1965]

Why is my disability taxable?

[xmasbaby0]

You have not told us what kind of disability you are receiving.  If it is Social Security disability, then it may be taxable if you have other sorts of income in addition to the SS reported on your SSA1099.

Disability Income

https://ttlc.intuit.com/questions/1901145-is-disability-income-taxable

TAX ON SOCIAL SECURITY

Up to 85% of your Social Security benefits can be taxable on your federal tax return.  There is no age limit for having to pay taxes on Social Security benefits if you have other sources of income along with the SS benefits.  When you have other income such as earnings from continuing to work, investment income, pensions, etc. up to 85% of your SS can be taxable. 

 What confuses people about this is that before you reach full retirement age, if you continue working while drawing SS, your benefits can be reduced if you earn over a certain limit. (For 2019 it was $17,640— for 2020 it was $18,240; for 2021 it was  $18,960.  For 2022 it was  $19,560  —  for 2023 $21,240)

After full retirement age, no matter how much you continue to earn, your benefits are not reduced by your earnings; your employer will still have to withhold for Social Security and Medicare.

To see how much of your Social Security was taxable, look at lines 6a and 6b of your 2022 Form 1040

https://ttlc.intuit.com/questions/1899144-is-my-social-security-income-taxable

https://www.irs.gov/help/ita/are-my-social-security-or-railroad-retirement-tier-i-benefits-taxable

You need to file a federal return if half your Social Security plus your other income is $25,000 when filing single or head of household, or $32,000 when filing married filing jointly, $0 if you are filing married filing separately.

Some additional information:  There are 13 states that tax Social Security—Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Rhode Island, Utah, Vermont, and West Virginia.  These states offer varying degrees of income exemptions, but four mirror the federal tax schedule: MN, ND,VT, and WV

[DoninGA]

Are you referring to a Form SSA-1099 you received for disability?

Or are you referring to a Form 1099-R that you received for the disability payment and there is a code G in box 7?

The disability income reported on the Form 1099-R is taxable income if it has a G in box 7.   Disability pensions shown on Form 1099-R if you haven’t reached the minimum retirement age set by your employer are entered on the Form 1040 Line 1h as ordinary income.

The benefits reported on a SSA-1099 can be taxable if you also have other types of income -

Up to 85% of Social Security Retirement/Disability/Survivors benefits becomes taxable when all your other income plus 1/2 your social security reaches:

• Married Filing Jointly - $32,000
• Single or Head of Household - $25,000
• Married Filing Separately - 0