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Understanding your tax obligations when receiving SSD


This time of the year, many people in Maryland who receive Social Security Disability benefits wonder what, exactly, their tax obligations are. Although the process for filing taxes while receiving SSD benefits is more complex than we can go into in a blog post, we hope that today's post will give you a high-level understanding of who owes taxes and how much.

The amount of taxes you will pay on your benefits depends on your filing status and your combined income. Combined income is the total of half your SSD benefits, your adjusted gross income and your nontaxable interest.

If you are married filing jointly, the following rules apply:

  • You will pay taxes on as much as half of your benefits if your total combined income (which includes your spouse's income) is more than $32,000 and less than $44,000.
  • If your combined income is higher than $44,000, you will pay taxes on up to 85 percent of your benefits.

If you are married filing separately, your benefits will most likely be taxed.

If you are filing as an individual, the rules are slightly different:

  • You may pay taxes on up to 85 percent of your SSD benefits if your combined income is above $34,000.
  • If your combined income is below $34,000 but higher than $25,000, up to half of your benefits can be taxable.

Not everyone has income outside of SSD benefits. If you rely solely on your SSD benefits for income, it is likely that you will not have to pay taxes on them.

Of course, filing a tax return is more complicated than what we can provide here. To better understand exactly how your benefits will impact your taxes, speaking to an attorney may be wise.

McGowan & Cecil, LLC McGowan & Cecil, LLC
Contact 301-761-2007
319 Main Street
Suite 300
Laurel, MD 20707
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