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Are Social Security Disability Benefits Taxable?

You got approved to begin receiving disability benefits and you are eager to start receiving you checks. But you have your disability benefits, it is important to understand how your taxes and other benefits and resources are affected.

The answer to that question depends on your income and marital status. If your only income is from SSD benefits, you typically will not be taxed. However, if you have a working spouse, part of your benefits may be taxable.

If you are single and your yearly income exceeds $26,000 a year (or you are married and your joint income exceeds $32,000 a year), your SSD benefits will be 50 percent taxable.

Retroactive Benefits

Obtaining retroactive benefits can also affect your tax status. Sometimes individuals must appeal a denied claim for several years before they are approved for benefits and they receive the past-due money. Receiving such a large amount all at once can bump you into a higher tax bracket. However, there are often ways to avoid this. You may be able to file amended tax returns for the previous years and reduce the amount of taxes you owe.

A professional tax adviser can advise you further about lump-sum distributions and other issues.

VA Benefits

As for VA benefits, military retirement pay based on age or length of service is considered taxable income for federal income taxes. However, military disability retirement wages and Veterans' benefits, including service-connected disability pension payments, may be partly or fully omitted from taxable income. VA benefits that are generally not taxed include: education, training, and subsistence allowances, disability compensation and pension payments for disabilities paid either to veterans or their families, grants for homes designed for wheelchair living, grants for motor vehicles for veterans who lost their sight or the use of their limbs, veterans' insurance proceeds and dividends paid either to veterans or their beneficiaries, interest on insurance dividends left on deposit with the VA, benefits under a dependent-care assistance program, and payments under the VA's compensated work therapy program.

How Our Norfolk Disability Lawyers Can Help

At Kalfus & Nachman PC, we've helped hundreds of people get the disability help they are entitled to. If you are or expect to be totally disabled for a period of 12 or more months, you may be entitled to disability payments from the Social Security Administration.

The process of applying for early Social Security Disability benefits can be long and frustrating. Without legal help, it can take up to 2 ½ years to get benefits. Hiring Kalfus & Nachman PC to help you receive these benefits can significantly lessen this waiting period. We have solid experience and understand complicated federal regulations governing Social Security Disability claims. We'll help you get through the system to get the benefits you need.

Proudly serving clients in Norfolk, Hampton, Newport News, Portsmouth, Roanoke, and Virginia Beach, Virginia.

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