Social Security Disability taxability

[cataxguy]

I have a client who receives Social Security Disability and it is reported on SSA-1099. The Soc Sec Admin says it is not taxable and SSI is not taxable; Searching the IRS website, I have not been able to find anything covering the taxability/not taxability of Social Security disability income.

Do you have any ideas and/or substantiation?

[Bees Knees]

Social Security disability benefits are taxed the same as Social Security retirement benefits.

Lesson to learn: Do not call Social Security or the IRS with tax questions.

SSI benefits, on the other hand, are not taxable.

[taxea]

SSI is taxable, SSDI is not. There is a difference between the two.

[New York Enrolled Agent]

SSI is taxable, SSDI is not. There is a difference between the two.

You're absolutely correct - there is a difference between the two.

However, you should have deferred to what Bees posted. He has it correct in what's taxable and what's not. You do not.

[JohnH]

I agree with Bees and NYEA.
IRS also agrees with Bees and NYEA.

SSI is not subject to income tax.
SSDI is subject to income tax, based on total income on the return.

http://www.irs.gov/publications/p907/ar02.html#en_US_2013_publink10008633

"Supplemental security income (SSI) payments. Social security benefits do not include SSI payments, which are not taxable. Do not include these payments in your income."

[TXEA]

It might help to explain the difference between the two programs.

SSI is a needs based program for people with low income and who are 65 and older, blind, or disabled. This is not taxable. I do not think a 1099-SSA is issued for SSI benefits; although, I have never had anyone who received such benefits to know for certain.

SSDI benefits are paid based on earnings record qualification and are taxed in the same manner as traditional SS retirement benefits.

[JohnH]

SSI is based on the recipient having very low income to begin with. I'm guessing the qualifying thresholds are so low that anyone receiving it is unlikely to even need to file a tax return. The reason there is no 1099-SSA issued is because SSI has nothing to do with Social Security. It is a supplemental income program which is only administered by the Social Security Administration. SSI has more similarities to public assistance than it has to Social Security Benefits.

[Gary2]

I do not think a 1099-SSA is issued for SSI benefits;"

That is correct. There's no way to even indicate on the 1099-SSA that there are non-taxable benefits being paid.

[taxea]

You're absolutely correct - there is a difference between the two.

However, you should have deferred to what Bees posted. He has it correct in what's taxable and what's not. You do not.

Well, excuuuuussseee me, but SSI Benefits are not SSDI benefits

[JohnH]

You're right that SSI and SSDI are different.
Where you are wrong is with respect to the taxability.
SSI is not taxable, whereas SSDI is taxable.

[S T]

Terminology and correctness always assists

If you search on the internet - SSI almost always refers to Supplemental Security Income - and this is not taxable - needs based program - and there would not be a 1099 Issued.

The Supplementary Security Income (SSI), on the other hand, is a federal income supplement program of the United States government which is funded by general tax revenues rather than by Social Security taxes. It is intended for aged, blind, disabled people, and children who have no income to pay for basic needs.
The beneficiaries of the SSI are individuals that have no means of income, no personal or real property, and no bank accounts or life insurance while beneficiaries of the SSA may have other sources of income and own properties

If you search on the internet - SSDI - almost always refers to Social Security Disability Insurance (pre - retirement age) possibly could be taxable depending on other income (should be a SSA 1099)

If you search on the internet - SSA retirement - almost always refers to Social Security Retirement Benefits - which also could be taxable depending on other income (I believe most of us refer to them as SSA retirement benefits, with a SSA-1099)

The Social Security Administration (SSA) is an agency of the United States federal government that is tasked with overseeing its insurance program intended to provide benefits to retired and disabled members and their families while the Supplementary Security Income (SSI) is a program of the United States federal government that provides supplementary income to aged, blind, and disabled individuals, and children who have no means of income.

[S T]

FYI

For those that would care to know

I have had two "clients" or dependents of clients this year trying to determine the benefits received - trying to ask all of the correct questions and request paperwork regarding SSI (Supplemental Security Income) versus receiving SSDI (Supplement Social Security Disability Income) and/or receiving the Social Security Retirement Income.

A lot of confusion - thankfully, those clients had some paperwork and pay advices that they received. And of course I always ask for the SSA 1099 Form that SS issues for either SSDI or the Regular SSA Retirement Income.

It is unfortunate to have to request some of this information, and I find that most of the Clients/Taxpayers do NOT have an understanding of the different programs.

Once I had received pay advices, or award notices, it was "really clear" SSI DOES NOT issue a Year End IRS form, and would not be taxable.

I hope this info will assist

Sandy

[Bees Knees]

Social Security disability benefits are taxed the same as Social Security retirement benefits...SSI benefits, on the other hand, are not taxable.

SSI is taxable, SSDI is not. There is a difference between the two.

You're absolutely correct - there is a difference between the two. However, you should have deferred to what Bees posted. He has it correct in what's taxable and what's not. You do not.

Well, excuuuuussseee me, but SSI Benefits are not SSDI benefits

taxea: I'm not sure why you think New York Enrolled Agent said they are the same. You appear to have a problem comprehending what people have written. Perhaps that is also why you are confused over what is taxable and what is not.