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6 Answers

Is it true that people on disability income don’t pay taxes?

Asked by: emeka22uche 417 views YA Discussion

I think I’ve read somewhere recently that if you are on some disability status (for instance, suffering from depression) and not working, you are exempt from paying taxes. Is this true? If so, why, and how can this be detrimental? I heard someone say that it’s good to help cure the disabled so they can finally start paying taxes, but why is this important? Thank you for your answers.


6 Answers



  1. Max Hoopla on Oct 20, 2012 Reply

    Income from workers compensation is not taxable and if your only income, or all but a small amount is from Social Security you will probably owe no tax but just being disabled doesn’t get you off the tax rolls.

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  2. Judy on Oct 20, 2012 Reply

    No,not true. If you’re on social security disability and that’s your only income, only joint income if you’re married, you wouldn’t owe any tax. SSI isn’t taxed. If you’re getting disability from a disability insurance policy that you paid for yourself, it isn’t taxable income. Workers comp isn’t taxed.

    Other than that though, disability income is taxed.

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  3. chatsplas on Oct 20, 2012 Reply

    Depends on source of disability payments
    If SSI, that is welfare, administered by social security, and non taxable income
    If SSD, the amounts received MAY be taxable, if recipient has other taxable income
    If disability comes from insurance, whether it is taxable depends on whether employer or employee paid premium

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  4. StephenWeinstein on Oct 20, 2012 Reply

    Not exactly.

    Government-funded disability benefits are exempt from income tax. If that is a person’s only income, then they have no income that is subject to income tax, so they pay no income tax, for the same reason as anyone else with no income that is subject to income tax.

    They are not exempt from paying any other tax.

    They are not exempt from any tax because of “disability status”.

    If they also have other income, then they are not exempt from paying tax on their other income. Only the disability benefits are exempt. All their other income is taxed the same as it would have been if they did not also disability income.

    Also, they have to pay all of the other taxes that everyone else pays. If they buy stuff, they pay sales tax. If they own a house, they pay real estate tax.

    The only tax that they don’t pay is tax on the government-funded disability income, and no one pays tax on government-funded disability income.

    “Disability status” does not exempt them from any tax.

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  5. Bobbie on Oct 20, 2012 Reply

    No and this is NOT exactly true at all for this purpose and time in your life.
    Some of SSDI social security disability amounts that you do receive a SSA-1099 for after the end of the tax year can and will become taxable income on your 1040 income tax return when you do receive other reportable worldwide income from all sources earned and unearned and tax exempt income will all used in determining how much if any of the SSB amounts would have to be added into your other taxable income on your correctly completed 1040 income tax return during the tax filing season.
    When you do not receive any other income normally none of the SSDI would ever become taxable income for that tax year only.
    The Supplemental Security Income (SSI) program pays benefits to disabled adults and children who have limited income and resources.
    And they will NOT receive any kind a 1099 for the amounts that they would receive during the tax year and will not be required to report the amounts as taxable income for the tax year on their income tax return.
    Hope that you find the above enclosed information useful. 10/20/2012

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  6. tro on Oct 20, 2012 Reply

    not necessarily
    it depends on who is paying the disability
    if it is a policy you paid for no, it would not be taxable
    if it was a benefit that you didn’t, yes it would be

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