Are Social Security disability benefits taxable?

It is important to note that Social Security disability benefits may be taxable according to the same rules that apply to standard Social Security retirement benefits. The taxability of these benefits is determined by the individual’s provisional or “combined” income, which is calculated as the sum of their Adjusted Gross Income (AGI), tax-exempt interest, and half of their SSDI benefits.

If an individual with disability benefits decides to go to college, the impact on their benefits may depend on the type of education they receive and how it affects their work status. If the individual earns a degree or trade certificate from college, these new qualifications will be considered during a continuing disability review (CDR). This review is conducted to determine if the individual is still considered “disabled” under the SSA’s definition. If the degree, certificate, or training qualifies the individual for new jobs and they are able to perform them despite physical or medical limitations, their benefits may be discontinued because they are no longer considered “disabled.”