Filing Taxes When One Spouse Is on Social Security Disability

When one spouse receives Social Security Disability Insurance (SSDI) benefits, it can significantly impact a couple’s financial situation. As tax season approaches, many married couples wonder how to file taxes when one spouse is on Social Security disability.

Do I have to claim my husband’s Social Security disability on my taxes?

If you’re married and file a joint tax return, you must report all income, including your spouse’s SSDI benefits. However, whether or not these benefits are taxable depends on your total income as a couple.

To determine if your spouse’s SSDI benefits are taxable, you’ll need to calculate your “provisional income.” This includes your adjusted gross income (AGI), nontaxable interest, and half of your spouse’s SSDI benefits.

If your provisional income exceeds certain thresholds, a portion of the SSDI benefits may be taxable. If your provisional income falls below these thresholds, your spouse’s SSDI benefits are not taxable. Up to 85% of the benefits may be subject to taxation if your income exceeds these limits.

For the 2023 tax year, the thresholds are:

• $32,000 for married couples filing jointly
• $25,000 for individuals

It’s important to note that while you must report your spouse’s SSDI benefits on your joint tax return, you don’t need to include Supplemental Security Income (SSI) payments, as these are not taxable.

Do you get a tax break if your spouse is disabled?

While there is no specific tax break for having a disabled spouse, there are several tax deductions and credits that you may qualify for, depending on your situation.

• Medical Expense Deduction: If you itemize deductions on your tax return, you can deduct qualifying medical expenses that exceed 7.5% of your AGI. This includes expenses related to your spouse’s disability, such as medical treatments, adaptive equipment, and accessibility modifications to your home.
• Earned Income Tax Credit (EITC): The EITC is a refundable credit for low to moderate-income working individuals and families. If your spouse works despite their disability and your income falls within the specified limits, you may qualify for this credit.
• Credit for the Elderly or the Disabled: If your spouse is under 65 and permanently and totally disabled, you may be eligible for this credit. To qualify, your spouse must have received taxable disability income during the year, and your income must fall below certain thresholds.
• Child and Dependent Care Credit: If you pay for care services for your disabled spouse while you work or look for work, you may be able to claim the Child and Dependent Care Credit. This credit can be up to 35% of your qualifying expenses, depending on your income.

Remember to consult with a tax professional to determine which deductions and credits apply to your specific situation.

Does New York State tax Social Security disability benefits?

No, New York State does not tax Social Security disability benefits. This means that even if a portion of your spouse’s SSDI benefits is taxable at the federal level, you won’t need to pay state income taxes on these benefits in New York.

However, it’s crucial to note that New York State has its own set of tax credits and deductions that may be available to you and your spouse. These include the Household Credit, the Earned Income Credit, and the Real Property Tax Credit. Be sure to explore these options when filing your state tax return.

Is Social Security disability taxable if married filing jointly?

As mentioned earlier, whether your spouse’s SSDI benefits are taxable when married filing jointly depends on your provisional income. If your provisional income exceeds the specified thresholds ($32,000 for married couples filing jointly), a portion of the benefits may be taxable.

It’s worth noting that married couples who file separately may be subject to different rules. In most cases, if you file a separate return and live with your spouse at any point during the tax year, 85% of your spouse’s SSDI benefits will be considered taxable income.

Seeking Professional Guidance

Navigating the tax system when one spouse is on Social Security disability can be challenging. To ensure you’re making informed decisions and maximizing your tax benefits, consider seeking the help of a qualified tax professional or disability attorney.

The compassionate disability attorneys at Fusco, Brandenstein & Rada, P.C. have over 40 years of experience serving New Yorkers with disabilities and their families. They understand your unique challenges and dedicate themselves to providing the knowledgeable legal guidance you need. If you have questions about filing taxes when one spouse receives SSDI benefits or need assistance with other disability-related legal matters, contact Fusco, Brandenstein & Rada, P.C. today at 516-496-0400 for a free consultation.