As the deadline for your annual tax return approaches, you need to know exactly where you stand. And for many US citizens, this requires knowing whether or not you can file taxes when you are on SSI.
And this article is focused on answering that very question.
We will also tackle all of your most frequently asked questions on the subject along the way, including whether or not you still need to file a tax return if my only income is SSI, and if so, how exactly to go about doing so.
By the end of this article, you will know not only where you stand on the subject, but also how best to proceed. Please feel free to scroll ahead to any section that jumps out at you. Here goes.
What Is SSI?
We felt it was best to kick things off with a few basics, seeing as many people confuse SSI with social security income, when, in fact, the SSI acronym stands for Supplemental Security Income.
SSI is a monthly benefit that is provided specifically for those individuals with limited income, and predominantly to those who are classed as either disabled or blind, or are aged 65 or older.
This benefit can also be made available to children who are blind, or disabled in some way.
To be clear, SSI is not part of social security benefits, but is a separate benefit designed to supplement the social security income of those who are in need of it.
It does have a lot in common with generic social security benefits in that it requires US citizenship, and an application for social security benefits will also incorporate an application for SSI if applicable.
A key difference between these two types of benefits is that no SSI benefits are sourced from taxes collected under FICA (Federal Insurance Contributions Act) or SECA (Self-Employment Contributions Act).
Instead, SSI is financed by the general funds of the US treasury, sourced from the likes of personal income tax and corporate contributions.
Another difference between the two benefits is that SSI payments are not based on prior work, which is great news for those whose disability has prevented them from ever finding employment.
What’s more, in most states, those who are in receipt of SSI can also get Medicaid. And this can be crucial to recipients because it means that they have the resources for things such as hospital stays, prescription drugs, doctors bills, and the like.
And this group of individuals is typically considered one of most in need of such services.
Do I Need To File A Tax Return If My Only Income Is SSI? Can I File Taxes On SSI?
The answer to the question of whether you can file for taxes when you’re receiving SSI, is that it depends…
As a general rule, if your only income is derived from SSI, then your benefits are not classed as taxable income, and as such this means that you would not need to submit a federal income tax return.
Or, in other words, SSI payments are not taxable.
However, there are exceptions to this rule, which are as follows…
Child Tax Credit
If you meet the qualifying rules for Child Tax Credit, then you can claim this tax credit for all of your qualifying children, even if you are claiming SSI, and are not usually required to file a tax return.
It’s well worth checking whether or not you qualify for this tax credit because if you do, you can expect to receive up to a whopping $3,600 per child per year. That’s a significant sum that could come in very handy.
To find out whether or not your family is eligible for the Child Tax Credit, simply head over to the relevant section on the IRS website, which you can access on this link.
Earned Income Tax Credit
You may even find that, as an SSI recipient, you may also be entitled to claim for the Earned Income Tax Credit (EITC). This is a credit provided to low to moderate income workers and families.
To find out whether or not your family is eligible for the Earned Income Tax Credit, simply head over to the relevant section on the IRS website, which you can access on this link.
There you will find a button titled “Check If You Qualify” and if you were to click on it, you would be taken to the EITC Assistant which features an eligibility calculator that you can use in conjunction with your documentation, including income statements, any expenses or adjustments to your income, and any documents showing money paid to you or taxes withheld from you.
For more information on Disability Benefits and Earned Income Rules, please head over to the IRS webpage on the subject, which you can access on this link.
How Do I File Taxes If I’m On SSI?
The other good news is that you can file a federal income tax return online free of charge. Simply head over to https://www.childtaxcredit.gov/triage/ for more details.
From there, you have two options available to you. You can either go for Option A to file a simple tax return to claim your Child Tax Credit in as little as 15 min.
Or, alternatively, you can go for Option B, whereby you file a full tax return to receive your maximum refund, which can include not only Child Tax Credit but also the Earned Income Tax Credit, the Child and Dependent Care Credit, and more.
So, to sum up, you certainly can file taxes if you are on Supplemental Security Income or SSI, and you stand to be considerably better off if you choose to do so…
It’s well worth finding out whether or not you may be entitled to claim Child Tax Credit and/or Earned Income Tax Credit.
And if it does turn out that you may be entitled to these benefits, filing a tax return is easy.