The deadline to file your taxes is April 15th. Below are three frequently asked questions (noted by the Virginia Commonwealth University National Training Center) that Work Incentives Planning and Assistance (WIPAs) organizations receive from people with disabilities about their taxes.
1. Are my disability benefits taxable?
The answer to this question depends on what benefits you get and how much your total income is. If you receive Supplemental Security Income (SSI), you will owe no Federal or State taxes on this benefit. If you have other forms of income in addition to your SSI (such as wages) you may owe taxes on that income.
If you receive Social Security Disability Insurance (SSDI), you may have to pay taxes on your benefits, depending on how much your total income is. Your total income includes your Social Security benefits and any other income you received such as wages, interest income and rental income.
Social Security reports that about one-third of current beneficiaries pay taxes on their disability benefits. If you are unsure about whether or not you have to pay taxes, contact the Internal Revenue Service (IRS) or seek the services of a qualified tax professional.
2. I will be getting an Earned Income Tax Credit payment this year. Is this something I need to report to Social Security?
The Earned Income Tax Credit (EITC) is a tax credit that helps people with low-to-moderate income reduce the amount of federal income tax they owe. This tax credit sometimes means you receive payment either as an advance from an employer or as a refund from the IRS. Even if a person doesn't earn enough money to owe federal income taxes, he or she may qualify for the EITC.
The Earned Income Tax Credit (EITC) is not counted as income for either the SSI program or SSDI and does not need to be reported to Social Security. Visit the online EITC Assistant to learn if you qualify and read this blog post for more information.
Did you know there are many other tax deductions available for people with disabilities? Visit this list of tax credits and deductions for people with disabilities to learn more.
3. I am getting income tax refunds this year. Do I need to report this to Social Security?
No, you do not need to report your tax refund as income - no matter what type of Social Security benefits you receive. There are, however, certain things you should report to Social Security after you find a job. Use this chapter of the Ticket to Work Tutorials to understand how to report your earnings and avoid overpayments after you find work.
If you haven't already done so, now is the time to organize your financial information and start preparing and filing your tax forms. Refer to these resources to learn where you can download forms and find other accessible products and services to help people with disabilities file their taxes.
Are you or someone you know receiving disability benefits and want to work? The Ticket to Work program has helped people with disabilities find the services and support they need - including advice about money and their benefits - to reach financial independence. Call 1-866-968-7842 (V) or 1-866-833-2967 (TTY) to talk to someone about your situation and how Ticket to Work can help you.
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