The lines blur a little between the several types of benefits overseen by the Social Security Administration. Only disability, retirement and survivor’s benefits are technically Social Security benefits. Although Social Security is in charge of Supplemental Security Income, these benefits are different in a few ways. For one thing, SSI isn’t taxable income.
SSI Is Needs-Based
Taxpayers pay into Social Security retirement and disability insurance over the course of their working years, but SSI is different. It’s needs-based -- you must have limited income to qualify. Income limits are strict because these benefits are paid out from the United States Treasury; workers don’t pay into them. Benefits are $710 a month for an unmarried individual as of the time of publication, and you don’t have to claim the money on your tax return.
Other SSI Requirements
Supplemental Security Income is available to individuals who are blind, disabled or age 65 or older, provided they meet the income limits. Blind and disabled children are eligible as well as adults. A few other federal rules apply as well, further narrowing the field of who can claim these benefits. You generally must be a legal resident of the United States, either a citizen or a national, and be present in the country for at least 11 months out of the tax year. Some qualified non-citizens are eligible as well.
Marriage and Taxes
If you’re single and qualify for SSI because you have minimal income, your benefits won’t be an issue at tax time. But if you’re married, this may muddy the waters. If your spouse earns income, the government attributes a portion of it to you, called “deeming spousal income.” This could prevent you from collecting SSI in the first place. Even if it doesn’t, you might end up with a tax bill if you file a joint married return. Talk to a tax professional about the advisability of filing separately, if you even have to file a return on your own at all -- you may not have enough taxable income to require filing.
Overlap with Social Security Benefits
Although SSI isn’t taxable income, other Social Security benefits sometimes are. The application for SSI is the same one used for Social Security benefits, so if you’re eligible for other benefits, you may receive them in addition to or in lieu of Supplemental Security. The rules are complex, but Social Security retirement benefits can be taxable under some circumstances. If you -- and your spouse, if you’re married -- have other income in addition to Social Security, you may have to pay taxes on 50 to 85 percent of your retirement benefits, depending on how much additional you earn. Because SSI isn’t taxable income, it shouldn’t count as “other income” when calculating taxes on retirement benefits, but speak with a professional if you have concerns.
- IRS.gov: Social Security and Equivalent Railroad Retirement Benefits
- Social Security Administration: Supplemental Security Income (SSI) Overview
- Disability Secrets: Will Marriage Affect My Disability Benefits from Social Security?
- Social Security Administration: Benefits Planner -- Income Taxes and Your Social Security Benefits
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