Do I Pay Income Tax on My SSD Benefits?
Depending on your income, up to half of SSD benefits may be taxable.
Usually, half of Social Security Disability benefits paid are always tax-free. The other half may be subject to federal income tax, depending on your filing status and income amount. Federal income taxes are usually the only possible SSD tax in the Sunshine State. Florida has no state income, inheritance, or estate tax. Generally, these income thresholds, which change every year, are rather low. So, there is a good chance you may pay federal income tax on your SSD benefits.
No one likes paying taxes. However, the possibility of a higher tax bill does not keep most people from taking higher-paying jobs or otherwise improving their financial situations. Likewise, the possibility of income taxes should not prevent disabled individuals from meeting with a Tampa Social Security Disability lawyer and learning more about the life-changing benefits to which they may be entitled.
Qualifying for SSD
The SSD application process is usually long and frustrating. Many applicants wait many months just for an initial review, which is a denial in most cases. That denial could be based on the following:
- Insufficient Work Credits: Usually, this requirement is straightforward. Typically, individuals must have about 20 work credits to qualify for SSD. Most people, but not all people, earn four credits a year. Furthermore, this rule has multiple exceptions.
- Type of Condition: About half of SSD applicants have a pre-approved medical condition that is listed in the Blue Book. So, about half of the applicants have a substantially similar condition. A Disability Determination Services officer may have a warped view of what constitutes a substantially similar condition.
- Extent of Disability: The condition must be so severe that the applicant cannot find or hold a job in his/her current field or transition to a new career field. So, a “disability” could have non-medical implications. Uncertified people cannot be teachers, even if they are medically qualified to teach.
Additionally, the qualifying condition must be terminal or expected to last at least a year. Different doctors usually have different opinions in this area.
Resolving SSD Claims
According to the Social Security Administration, people are either disabled or not. There is no middle ground or partial disability. So, eligibility is non-negotiable. However, a Tampa Social Security Disability attorney often negotiates things like the amount of benefits.
As mentioned, income taxes on SSD benefits involve income thresholds. Frequently, if an attorney asks for lower disability payments that keep the applicant below that threshold, SSA lawyers normally agree. All they care about is the amount of benefits the agency pays, at least in most cases.
If the two sides cannot resolve their differences out of court, the matter proceeds to an Administrative Law Judge hearing. The initial review denial rate is very high, mostly because it is only a paper review. In contrast, the ALJ approval rate is very high. At this hearing, an attorney can challenge the other side’s evidence, make legal arguments, and introduce evidence. This advocacy usually makes a very big difference.
Some applicants may have some appeal options after the ALJ level, but in most cases, they are long shots.
Reach Out to a Thorough Hillsborough County Lawyer
Some SSD benefits are taxable in Florida. For a free consultation with an experienced Social Security lawyer in Tampa, contact the Rooth Law Firm. We do not charge upfront legal fees in these matters.