When Benefits Will Be Paid
Once your Social Security Disability Income (SSDI) application is approved, the Social Security Administration (SSA) will send a notification letter showing the effective date and the monthly benefits you will receive. Social Security disability benefits are paid for the sixth full month after an individual’s onset date of disability, so there is roughly a six-month delay between the date a person became disabled and when they can receive SSDI benefits. For example, if your onset date is in February, the first month for which you can receive benefits is August.
Back Payments for SSDI
Back payments for disability benefits are available for the period between filing an application and SSA approval. This is important, because although there are certain situations where applications can be expedited, most are caught in the substantial backlog at the SSA. Plus, if your application is initially denied, the appeals process can take several months, or even years. Retroactive payments for up to 12 months may also available for the period prior to your application, but after your disability onset date.
Typically, SSDI back payments are made in a lump sum. Depending on your income and circumstances, there may be tax implications. To avoid paying extra taxes in the year this lump sum is received, you may be able to amend your returns for prior tax years in order to spread the back payment out. Talk to your lawyer and tax professional about the best way to proceed if this applies to you.
Taxes on Benefits
Supplemental Security Income (SSI) payments are not taxable. However, Social Security Disability Income (SSDI) is taxable in the same way other Social Security benefits are, like retirement and survivor benefits.
On your tax returns, you report the total amount of Social Security benefits you receive, regardless of type. The taxable portion of your Social Security benefits depends on your other income, and your filing status. To figure out whether your benefits are taxable, you must first calculate your modified adjusted gross income (MAGI). Your MAGI equals half of your total social security benefits, plus all other income you received.
Next, determine which “base amount” applies to your situation. For 2017 taxes, the base amount if married filing jointly is $32,000, whereas it is $25,000 if filing as single or head of household. If your MAGI is less than your base amount, you do not have any tax liability for these benefits. If your MAGI is higher than your base amount, the portion above the base is taxable. However, the portion of Social Security benefits that can be taxed federally is capped at 85 percent.
If you have any questions regarding SSDI benefits, it is best to consult an attorney who can give accurate legal guidance tailored to your unique situation.
Contact an Experienced Adams County SSDI Attorney
At the Law Office of John A. Anderson, Jr., LLC, we understand the challenges you face when you’re disabled. We provide compassionate, experienced legal representation so you can obtain the disability benefits you deserve. Contact us or call (303) 880-7994 today.