How Do Social Security Disability Benefits (SSDI) Affect Taxes?

Income dictates whether SSDI benefits are taxable. To determine whether your SSDI benefits are taxable, add one-half of your disability benefits to your other sources of income. The Internal Revenue Service (IRS) determines the income threshold. For a single individual, the threshold amount is currently $25,000 and $32,000 for a married couple that files jointly. 

Colorado is one of thirteen states that taxes SSDI benefits. The state’s pension-subtraction exemption is based on the age of the taxpayer, income, and considers all taxable and non-taxable income.  

If you have additional questions about how your benefits may affect your taxes, seek a licensed tax professional. If you or a loved one needs further assistance, contact a social worker for more help and information.

June 16, 2021