Filing Taxes When One Spouse Is on Social Security Disability

Filing taxes when one spouse is on Social Security disability in New York presents many questions. Is there a disabled spouse tax credit? Do you have to claim your spouse’s disability when filing? Let’s answer those questions in detail.

Spouse Social Security Disability Issues When Filing in New York

You have to report all income you and your spouse earned when filing a joint tax return in New York. That means you have to report your spouse’s Social Security disability benefits.

New York State doesn’t tax the first $20,000 per person of disability income. However, federal taxes may still apply. Depending on your current circumstances, you may be able to exclude disability benefits from your state tax returns. Check the instructions for form IT-221 for more information.

While the state does not tax this income, Social Security Disability Insurance (SSDI) has been subject to federal income tax since 1984, though Supplemental Security Income (SSI) is not. Note that, per the IRS, Social Security benefits don’t just include disability income. They also include survivor and retirement benefits. Be sure to account for all relevant Social Security income when filing taxes.

Whether Social Security disability benefits are taxable depends on your “provisional income.” Note that the IRS does not use the term “provisional income,” though it is widely used to refer to this taxable threshold. To determine your provisional income when filing jointly, you should:

  • Take half of your spouse’s Social Security income (and half of yours if you receive any)
  • Add that number to the sum of all your other combined income

Social Security disability benefits may be subject to taxation if this total is over $32,000. Up to 50 percent of benefits may be taxable if you’re married filing jointly and your income is between $32,000 and $44,000. If you’re married filing jointly with an income of greater than $44,000, up to 85 percent of Social Security disability income may be taxable.

The thresholds are different for those receiving Social Security disability benefits and filing as single. For example, for someone who is single and has a provisional income of more than $25,000, 50 percent of Social Security income may be taxable.

Tax Credit for Disabled Spouse in New York: What You Need to Know

Filing Taxes When One Spouse Is on Social Security DisabilityIs there a tax credit for spouse not working in New York? Technically, New York doesn’t offer a specific tax break for having a disabled spouse. However, you might qualify for deductions like the following:

  • Medical Expense Deduction  You may qualify for a medical expense deduction by itemizing deductions and deducting medical expenses. These medical expenses can include expenditures for a disabled spouse’s treatment as well as ordinary medical care. You can only deduct these expenses if they exceed 7.5 percent of your adjusted gross income (AGI).
  • Earned Income Tax Credit (EITC)  If your spouse works but their income is low to moderate, you might qualify for this tax break.
  • Credit for the Elderly or Disabled  As the name implies, this credit is available to some elderly taxpayers and some who receive disability income. Check the criteria to find out if your spouse qualifies.
  • Child and Dependent Care Credit  Have you paid for child care or related expenses so you can look for work? You may qualify for this credit if so. Usually, both spouses have to be looking for work when filing jointly to earn this credit. However, the rules can be different when one spouse is disabled and can’t work.

The above are federal tax breaks and deductions. New York offers its own set of deductions and breaks that you may qualify for on your state taxes. Research your options to find out how you can reduce your tax burden. Remember, New York does not tax SSDI benefits.

The information here applies when you’re married filing jointly with a disabled spouse. Different rules can apply if you’re filing separately.

Contact a New York Social Security Disability Lawyer

Applying for Social Security disability benefits is already a complex process. The experience can become even more complicated when it’s time to pay your income taxes.

Fortunately, help is available. A New York Social Security disability lawyer with Fusco, Brandenstein & Rada, P.C. is available to answer your questions and assist you with your Social Security needs. Contact us online or call us at 516-496-0400 for a free consultation, and find out how we can help you today.

Last Updated : April 19, 2024
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