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USAA is The American Legion's preferred provider of financial services. Offering a range of top-rated financial and insurance products and services. USAA welcomes honorably discharged U.S. military veterans, active-duty troops and qualified family members and descendants of those who have served. USAA contributes funds to American Legion programs when members join through a dedicated channel:
usaa.com/legion or by calling toll-free at 1-877-699-2654.

Financial Questions & Answers

Financial Questions & Answers

Question:

Is Social Security disability taxable or exempt? – Ralph

Answer:

Good question. How about “maybe” as a definitive answer? Two types of government benefits include SSDI (Social Security Disability Insurance) and SSI (Supplemental Security Income). SSDI provides income for the disabled, while SSI may provide additional income for the disabled or for elderly folks who demonstrate financial need. SSI is not taxable, but SSDI is taxable under the same rules as Social Security retirement. Check out IRS Publication 915 for more information.

So, in a nutshell, if you don’t have any other income, your SSDI should not be taxable. However, if you do have income from other sources, such as investments, military retirement, part-time work, etc., taxes could be due. Basically, if half your Social Security plus all of your other income is more than $25,000 (single) or $32,000 (married, filing jointly), a portion of your benefits will be taxable.