From today’s Chronicle: Millions of Americans received Social Security disability benefits in 2010, and many benefit from private insurance policies. With tax season upon us, many are wondering – “are disability benefits taxable?” “How much is taxable?” “Does repayment to a private insurance carrier factor into tax liability?”
Social Security Benefits ARE Taxable
If earnings – including benefits – are beyond a calculated base amount, then a portion of Social Security disability benefits will be taxed. The base amount takes into consideration all the forms of income that are received and may be calculated by filling out the IRS’ Social Security and Equivalent Railroad Retirement Benefits Form 915 (www.irs.gov/pub/irs-pdf/p915.pdf).