Yes, there are circumstances in which you may have to pay federal income tax on your SSD benefits. It will depend on whether you are filing an individual or joint tax return.

According to the SSA, if you file an individual return and your income exceeds $25,000, you will pay federal taxes on your benefits. If you file a joint return and the combined income of you and your spouse exceeds $32,000, you will have to pay federal taxes on your benefits as well.

If you would like to avoid a shock when you file your tax return, you can request to have federal taxes withheld from your benefits during the course of the year. You can choose to have 7, 10, 15 or 25 percent of your benefit payments withheld each month.

See the Internal Revenue Service’s W-4V form to see how you can arrange for voluntary tax withholding.

Posted in: SSD FAQs