IRS Casts Wide Net on Social Security Benefits — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
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IRS Casts Wide Net on Social Security Benefits

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in Small Business Tax

Q. I read your recent article on Social Security benefits with great interest. (RR, 6/26/06) Do these tax rules also apply to disability benefits? S.C., Winter Garden, Fla.

A. Yes. The computation for taxing Social Security benefits includes monthly survivor and disability benefits. They are grouped with your retirement benefits to determine provisional income (PI). If your PI for the year exceeds the annual threshold ($25,000 for unmarried filers, $32,000 for joint filers), a portion of the benefits are subject to tax. Tip: Supplemental Security Income payments, which are funded by general tax revenues, are not taxable.

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