What does not count as income for SSI?
Generally, things that don't count toward your income limit include: State SSI supplement payments. Supplemental Nutrition Assistance Program (SNAP) benefits (food stamps) Section 8 housing vouchers.
For example, if someone pays an individual's medical bills, or offers free medical care, or if the individual receives money from a social services agency that is a repayment of an amount he/she previously spent, that value is not considered income to the individual.
Payments or benefits excluded by provisions of a Federal statute other than Title XVI of the Social Security Act; Any public agency's refund of taxes on real property or food; Assistance based on need and funded wholly by a State or one of its political subdivisions (including Indian tribes).
What is income? SSI considers “income” anything a person receives that can be used for food or shelter. Income includes but isn't limited to cash, checks, and “gift” items received, such as food and shelter. SSI divides income into 2 categories — earned and unearned.
Income is considered wages from an employer and does NOT include investment earnings, government benefits, interest or capital gains. In 2022, the lower limit was $19,560. So for every $2 an individual earns above this amount, the Social Security administration will withhold $1 from a worker's benefit.
The income exclusion rule sets aside certain types of income as non-taxable. There are many types of income that qualify under this rule, such as life insurance death benefit proceeds, child support, welfare, and municipal bond income. 1 Income that is excluded is not reported anywhere on Form 1040.
Payment of your bills by someone else directly to the supplier is not income. However, we count the value of anything you receive because of the payment if it is in-kind income as defined in § 416.1102.
The SSI program specifically disregards federal and/or state income tax refunds as a form of income. This is because SSI counts your gross income when it's received so your SSI check has already been adjusted without regard to any taxes withheld.
You report the taxable portion of your social security benefits on line 6b of Form 1040 or Form 1040-SR. Your benefits may be taxable if the total of (1) one-half of your benefits, plus (2) all of your other income, including tax-exempt interest, is greater than the base amount for your filing status.
1. You have little or no income (like wages and Social Security benefits) SSI is generally for individuals who don't earn more than $1,971 from work each month.
Does SSI count self employment income?
You are self-employed if you operate a trade, business or profession, either by yourself or as a partner. You report your earnings for Social Security when you file your federal income tax return.
Earnings refers to money earned from employment, whereas income is total money received, including from earnings, benefits and pensions, and so on.
The Social Security five-year rule is the time period in which you can file for an expedited reinstatement after your Social Security disability benefits have been terminated completely due to work.
The Tax Cuts and Jobs Act (TCJA) created a deduction for households with income from sole proprietorships, partnerships, and S corporations, which allows taxpayers to exclude up to 20 percent of their pass-through business income from federal income tax.
Gross income is all non-excludable income from any source including both earned and unearned income. Net income is what you are left with after deductions are applied to your gross income.
Income Exclusion Rules and Social Security
The goal of the program is to pay for an individual's most basic needs, such as food and shelter. Some items that are considered income by the SSA are excluded when determining the amount an individual has to pay.
There is typically a tax-free gift limit to family members until a donation exceeds $15,000 (jumping up to $16,000 in 2022). In these instances, the IRS is usually uninvolved. Even then, it can just result in more paperwork. At the federal level, assets you receive as a gift are usually not taxable income.
The IRS allows every taxpayer is gift up to $18,000 to an individual recipient in one year. There is no limit to the number of recipients you can give a gift to. There is also a lifetime exemption of $13.61 million.
Current beneficiaries who exceed the limits are suspended and then terminated from program participation if their savings remain above the limits, and they must repay any benefits paid while they are over the limit. SSI beneficiaries are limited to only $2,000 in assets of any kind.
Generally, if Social Security benefits were your only income, your benefits are not taxable and you probably do not need to file a federal income tax return.
How do I get more money from SSI disability?
- Reaching Retirement Age. ...
- Death of an Adult Child. ...
- Additional Benefits Based on Your Own Work. ...
- Benefits From a Former Marriage. ...
- Child Entitled to Benefits. ...
- Update the Social Security Administration About Any Changes. ...
- Consider Other Types of Benefits.
We only look at Substantial gainful activity (SGA) when you first apply for SSI. If you are receiving SSI and go to work, SGA is not an issue. However, we do have to figure your countable income. For more information, see the SSI Spotlight on Impairment–Related Work Expense.
In 2022, the maximum SSI benefit for an individual is $841 per month, and the average per person is $623. Think about it: Less than $900 a month to cover the basic necessities of rent, transportation, food, utilities, medical costs not met by Medicaid, etc. For most of us, this would not be enough.
You can return to work for at least 9 months and still get your full Disability payment. We call this a “trial work period.” In 2024, any month you earn over $1,110 before taxes will count towards this trial. The months don't need to be consecutive, just within a rolling 5-year period.
| Under 65 | |
|---|---|
| Single | $13,850. |
| Married, filing jointly | $27,700 if both spouses are under age 65. $29,200 if one spouse is under age 65 and one is 65 or older. |
| Head of household | $20,800. |
| Married, filing separately | $5. |
References
- https://www.ssa.gov/OP_Home/cfr20/416/416-1103.htm
- https://www.ssa.gov/oact/cola/incomexcluded.html
- https://www.johnfoy.com/faqs/how-can-i-increase-my-ssdi/
- https://www.thebalancemoney.com/what-is-an-income-exclusion-rule-5210109
- https://www.ssa.gov/ssi/text-work-ussi.htm
- https://vcu-ntdc.org/resources/WIPA_OtherResources/FAQsTaxes&SSADisabilityBenefits_2023-07-11.pdf
- https://www.forbes.com/advisor/retirement/social-security-5-year-rule/
- https://www.irs.gov/pub/irs-news/at-01-08.pdf
- https://www.portebrown.com/newsblog-archive/what-are-the-tax-implications-of-gifting-money-to-family-members
- https://taxfoundation.org/taxedu/glossary/pass-through-business-deduction-sec-199a/
- https://www.ssa.gov/pubs/EN-05-11015.pdf
- https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/methodologies/explainingincomeearningsandthegenderpaygap
- https://www.cbpp.org/research/social-security/the-case-for-updating-ssi-asset-limits
- https://www.ssa.gov/OP_Home/handbook/handbook.21/handbook-2137.html
- https://calswec.berkeley.edu/sites/default/files/faq_for_nmds_sws_and_caregivers_on_calfresh_benefits.pdf
- https://www.cnbc.com/select/social-security-retirement-earnings-test-how-it-works/
- https://www.ssa.gov/ssi/eligibility
- https://www.ssa.gov/disability/work
- https://www.investopedia.com/terms/i/identified-shares.asp
- https://www.ssa.gov/help/iClaim_sei2.html
- https://www.nerdwallet.com/article/taxes/do-i-need-to-file-a-tax-return
- https://www.irs.gov/faqs/social-security-income
- https://smartasset.com/retirement/gift-tax-limits
- https://www.ohiodisabilitylaw.com/blog/2022/06/how-do-they-expect-me-to-live-on-ssi-we-get-asked-this-question-a-lot/
