Do I Have To Pay Taxes On Social Security Disability Benefits?

This really is a question that you should be asking an accountant or whoever assists you in filing taxes each year.

According to Social Security:
You will have to pay federal taxes on your Social Security benefits if you file a federal tax return as an individual and your total income is more than $25,000.  If you file a joint return, you will have to pay taxes if you and your spouse have a total income of more than $32,000.
Depending on the state you live in you may not have to pay state income tax for the benefits that you receive from Social Security.
Social Security has no authority to withhold state or local taxes from your benefit.  Many states and local authorities do not tax Social Security benefits.


What Is Reconsideration?

In most states if you want to appeal Social Security's decision to deny you disability benefits at the initial application you must "request reconsideration."

Several states, including New York, have eliminated this stage of the process. If you receive a denial notice from Social Security at the initial application then the letter from Social Security will inform you whether your next level of appeal is requesting reconsideration or, if you can request a hearing in front of an Administrative Law Judge.

In most states, including New Jersey, if you want to appeal Social Security's decision at the initial application, then you must request reconsideration. What does this mean? Basically, a different disability examiner employed by Social Security will review your case and determine whether or not you are disabled. Unfortunately, the overwhelming majority of the time, the result at Reconsideration is the same as the initial decision. Only about 20% of applicants are successful in getting approved for Social Security Disability benefits at the Reconsideration level.

If you have been denied Social Security benefits at the initial application and want to appeal that decision in most states you must file for reconsideration. It is important if you are not represented by an attorney that you read the letter from Social Security very carefully and submit the appeal within the required time frame. Social Security requires that if you are filing for reconsideration that your request must be returned within 65 days from the date on the denial letter. It is important to know that filing a new application is very different than filing an appeal.