Is Supplemental Security Income (SSI) Taxable?

You don't have to report SSI income to the IRS

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Supplemental Security Income (SSI) benefits are considered to be government assistance, which means they aren't taxable. Like welfare benefits, they don't have to be reported on a tax return.

Some confusion arises, however, because the Social Security Administration—not the IRS—does require you to report income information in order to qualify for SSI. Here's how income affects SSI.

SSI Is Needs-Based

SSI is a needs-based program. It benefits the disabled, including blind individuals, and those over age 65 whose income and resources fall below certain limits. It's intended to pay for an individual’s most basic needs—shelter and food.

Note

Supplemental Security Income recipients are usually eligible for other government benefits, such as the Supplemental Nutrition Assistance Program (SNAP). In some states if you live alone, your SSI application is also an application for SNAP.

Individuals must live in the United States or the Northern Mariana Islands to qualify for SSI, and they can't leave the country for 30 or more consecutive days in any given year. Residents of public institutions—including inmates in prison—usually can't receive SSI, though there are some exceptions for situations including temporary homeless shelters and educational institutions.

To be considered disabled, you must be unable to perform any "substantial gainful activity," and your disability must have lasted, or must be expected to last, for at least 12 months.

Taxes on Retirement Benefits vs. SSI

The IRS differentiates between Social Security retirement benefits and SSI payments—SSI payments are not taxable, but retirement benefits may be. Retirement benefits are sometimes completely non-taxable, but it depends on your other sources of income.

Note

Unlike Social Security, which you pay into over the course of your working years, SSI isn't funded by taxes contributed by you. Rather, it's funded by the federal government’s tax revenues.

The distinction can be confusing, because it’s possible for someone over age 65 to collect both SSI and Social Security retirement benefits. The Social Security Administration oversees both programs, and beneficiaries use the same application for both payments.

Taxation of Social Security Retirement Benefits

Retirement benefits are taxed if the cumulative total of all the your income, including Social Security retirement benefits, earnings from continued employment, and unearned income from investments hits $25,000 for the year for single taxpayers or $32,000 for those who are married and filing jointly.

If you receive both SSI and retirement benefits, then it's unlikely that you would owe taxes on those benefits. That's because SSI is needs-based, so a taxpayer receiving SSI probably doesn't have other sources of income that would push their Social Security retirement benefits into the taxable range. It may be best to check with a tax professional if you receive SSI and have income from other sources.

Reporting Income to the Social Security Administration

Although SSI benefits aren't taxable, you must nonetheless report all sources of your income to the Social Security Administration (SSA) if you're collecting SSI. But you do not have to report SSI income to the IRS. The distinction isn't so much whether benefits are reportable, but to whom they're reportable and why.

You must report all sources of income to the SSA because your need for financial support might be partially—if not entirely—erased if you come upon another source of income. This extra income could mean that you would no longer be eligible for SSI.

Understandably, the SSA wants to know about this turn of events. Likewise, if you should become employed so you're earning (even if it's just a little income), that would most likely reduce your benefits. However, it may not completely eliminate your benefits.

What Kinds of Income To Report

According to the SSA, reportable income includes all money that comes into your household, including money that you or your spouse receives. If your wages increase or decrease, you should report that, as well as receipts for work expenses related to your disability.

There are a few sources of income that the SSA does exclude from counting against you for qualifying purposes, such as rent subsidies.

When To Report

You need to report whenever there is a change in your earnings, such as when you start or stop work. Let the SSA know on or before the 10th day of the month after the month of change. For instance, if you get a new job on October 17, you need to report this no later than November 10.

How To Report

You can call, visit, or write to your local Social Security office or call the main toll-free number at 1-800-772-1213. There are also telephone, online, and mobile tools for reporting wages for SSI.

Frequently Asked Questions (FAQs)

Do you have to file a tax return if you're on Social Security?

Whether you have to file a tax return if you receive Social Security depends on whether you receive any additional income and how much it is. If you only receive Social Security with no other income, you may not have to file a tax return. If you have other income, that income plus 50% of your Social Security benefit determines whether you need to file.

You'll need to file if that total is $25,000 or more if you're a single filer, $32.000 if you're married filing jointly, $25,000 if you're married filing separately and you lived apart from your spouse for the entire year, and $0 if you're married filing separately and you lived together for some part of the year.

Do you have to file taxes on disability income?

Social Security disability benefits follow the same rules as Social Security retirement benefits when filing and paying federal income taxes. If you only receive Social Security disability, you may not have to file a tax return. If you receive income in addition to your disability benefits, you will have to file if your income plus 50% of your benefits meets certain thresholds.

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Sources
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  1. Internal Revenue Service. "Income Quick Reference Guide."

  2. Social Security Administration. "Supplemental Security Income (SSI) Benefits."

  3. Social Security Administration. "Supplemental Security Income (SSI) and Eligibility for Other Government and State Programs."

  4. Social Security Administration. "2121. Institutionalization."

  5. Social Security Administration. "Supplemental Security Income (SSI) Eligibility Requirements."

  6. Internal Revenue Service. "Regular & Disability Benefits."

  7. Social Security Administration. "Supplemental Security Income (SSI) Overview."

  8. Social Security Administration. "Income Taxes and Your Social Security Benefit."

  9. Social Security Administration. "Reporting Responsibilities."

  10. Social Security Administration. "Income Exclusions for SSI Program."

  11. Social Security Administration. "Spotlight on Reporting Your Earnings to Social Security – 2022 Edition."

  12. IRS. "Top Frequently Asked Questions for Social Security Income."

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