Social Security Disability Identification

• The Social Security Disability program (SSD) is a program administered by the Social Security Administration that grants benefits to disabled individuals. Benefits are granted only to those individuals who are unable to work due to their physical conditions. These benefits are funded by the Social Security tax, which is 6.2 percent of each employee's wage. Eligibility to receive benefits relies on your ability to prove that you have a fully debilitating condition, and not a condition that is only partially debilitating. Having a fully debilitating condition means that you are incapable of working any job. Your conditions must also last at least a full year or eventually lead to death.
  
  

Taxable Disability Benefits

• Social Security benefits in general are taxable. To determine if you must pay income tax on your benefits, you need to determine how much you receive every month in income. As of 2010, the IRS requires you to pay income tax on your benefits if you are single and your total annual income is more than $25,000. (Total income means all types of income you receive, not only disability benefits.) If you are married and your total income is higher than $32,000, you must also pay taxes on your disability benefits.
  
  

Portion of Your Benefits That is Taxable

• The IRS does not require you to pay income tax on more than 85 percent of your benefits. As of 2010, you must pay income tax on 50 percent of your disability benefits if you are single and your total income is between $25,000 and $34,000. If your total income is higher than $34,000, you are required to pay income tax on 85 percent of your benefits. If you are married, you are also required to pay income tax on 50 percent of your benefits if your total income is between $32,000 and $44,000. If your total income is higher than $44,000, you must pay income tax on 85 percent of your benefits.
  
  

Social Security Disability Benefits

• How much you receive on disability benefits depends on how long you have worked and your age. You are required to have worked for enough time to pay for Social Security tax. Once you know that you are eligible to receive benefits, these benefits start in your sixth month of disability. Benefits are paid monthly, and you must pay income taxes according to the amount of income you receive from all sources.