Is Disability taxable? (state, married, payments, benefits)
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When I get disability is it taxable and is the back pay lump sum also taxed? I have heard both yes and no. Thanks for any feedback.
Most likely not...if it's your only income...and the back pay probably isn't either. Only half of your SS is taxable and if you earning under so much for the year you wont owe anything...but if you are married and your wife works you will have to add half of your SS to her income if you file a joint filing. But it is best to check with the IRS after you get your first payment. They will let you know for sure and if you are going to have to pay you can have SS hold out so much of each payment.
Neither SS disability payments nor lump sum payments are taxed by the Feds. Mine weren't. That's why they had to pass a special provision to allow SS recipients who normally don't file taxes to be able to file and get the economic stimulus.
State may be different.
The benefits themselves aren't taxable but may be included with other income and you could owe taxes on a larger sum because of them.
Thanks for info so far. Its a relief to know that what little I'm going to get does not get taken right back. I've been paying twice in taxes a year than what i'm supposed to get so would hope to have some relief. I live in KY and will be getting 1434.00 a month. My wife only makes 15,000.00 a year now but has opportunity in 1 yr. to get promotion and make 35,000.00 +/-. So that much extra in income should make it easier to pay more in taxes. We have no debt but also no assets either. Just trying to get ducks in a row of best way to budget for future. Thanks again.
Bigg Mann, you may want to check with an accountant or professional tax preparer. I know people on disabiity who do pay taxes on it. There are many factors that play into it; every case is unique. Please check with someone who does this for a living.
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