There is a debate about whether Social Security retirement benefits should be taxable or not. While some States may tax retirement benefits, other States do not. SSI beneficiaries are in a different situation.
Bear in mind that SSI benefits are for Americans who need financial support. That is, they have a low income and little to no resources. Any taxes on these benefits would be a big blow for their financial stability.
Are SSI benefits taxable in the USA in 2024?
According to the IRS (Internal Revenue Service), Supplemental Security Income (SSI) benefits are not taxable. For your information, Social Security only administers applications and paydays, but SSI payments are funded by the Federal Government.
Social Security benefits only include monthly disability insurance, and survivor and retirement benefits, but not Supplemental Security Income. Social Security benefits are taxable up to a limit. Most recipients may not need to pay taxes if they do not have other substantial earnings apart from their benefits.
If you would like to know more about Social Security Income and the Internal Revenue Service rules, you can visit https://www.irs.gov/faqs/social-security-income#:~:text=Answer%3A,%2C%20which%20aren’t%20taxable.
SSI benefits aren’t taxable, but what about retirement or SSDI benefits?
According to the Social Security Administration, retirement or SSDI recipients may have to pay taxes on up to 85% of their benefits. This happens if they file a Federal tax return individually and their combined income is over the $25,000 limit.
In the same way, beneficiaries may have to pay taxes on up to 85% of their benefit if they file jointly and they and their spouse’s combined income is more than 32,000 dollars. Married couples who do not file a joint return follow a different rule.
In this case, if you got married but you file separately, you will probably have to pay taxes on your benefits. So, it may be a better idea to file jointly and avoid paying taxes on your benefits. If you have a low Social Security check, apply for SSI too.