Do People on SSI Disability Need to File Taxes?

The first step in filing a tax return is deciding whether you are actually required to file. Fortunately, the government has very clear guidelines that set a limit on how much income you can earn before filing a return. Unknown to many people, however, is that some categories of income are exempt from taxation. If you're receiving Supplemental Security Income (SSI), then your income is in an exempt category.

Significance

Supplemental Security Income (SSI) is designed to help taxpayers who are over age 65 and are either blind or disabled. The monthly SSI payments are intended to help pay for essential living expenses such as food, clothing and shelter.

Taxability

SSI is considered a protected category of income and, as such, is not required to be included on your income tax return. However, if you receive other income or payments during the tax year, then you still may be required to file a return. Filing requirements are based on age, filing status and income. If you earned income in addition to SSI and, based upon that income alone, you meet the filing requirements, then you must file an income tax return for that tax year. Additional income includes. but is not limited to, wages, 401(k) disbursements, pensions and interest income.

Filing Requirements

For 2009, general filing requirements based on income are as follows: $9,350 if single, $12,000 if head of household, $18,700 if married filing joint, $3,650 if married filing separately, and $15,050 if you are a qualifying widow. Filers who are age 65 are allowed to earn more income than ordinary taxpayers before they are required to file an income tax return. Elderly taxpayers can earn up to $10,750 if single, $13,400 if head of household, $20,900 if married filing joint (or $19,800, if only one spouse is 65 or older), and $16,150 if a qualifying widow or widower.

Considerations

Unlike Social Security, which is paid to people who are completely or partially retired ,or Social Security Disability, which is paid much like an insurance benefit to those who have become disabled, SSI is a welfare program based on a person's income. Although SSI is administered by the Social Security Administration, money for SSI comes from the general fund of the Treasury, not Social Security.

Resources

If you need additional help with determining whether you are required to file a return, call the Social Security Administration at 800-772-1213, from 7a.m. to 7 p.m., or the IRS at 800- 829-1040, between 7a.m. and 10 p.m.

References

• Social Security Administration: Supplemental Security Income
• Supplemental Security Income: Seven Facts About Social Security Benefits
• Internal Revenue Service: Publication 915-Social Security and Equivalent Railroad Retirement Benefits