While Houston Social Security lawyers Marc Whitehead & Associates can’t speed up the time it takes the Social Security Administration (SSA) to make a decision on your claim, we can make the process flow more smoothly by providing all the information the SSA needs to make their decision.
One of the biggest frustrations for applicants filing for disability benefits is the long length of time it takes for the SSA to make a decision on a claim. Some applicants have been forced to wait over a year while the SSA decided their claim.
The good news is, once a claim is approved, the beneficiary will receive back pay to cover the benefits they didn’t receive while the SSA was making its decision (minus the five-month waiting period), starting from the Effective Onset Date of their disability (usually the date they applied for benefits).
Social Security Disability Back Pay Is Taxable As Part of the Current Year’s Income
However, this back pay can cause problems for some recipients when tax time comes around. According to the IRS, the taxable part of a beneficiary’s lump-sum payment of benefits received in the current year is considered to be a part of the current year’s income, even if the payment includes benefits for an earlier year. The addition of the back payment increases a person’s reported income, potentially increasing the amount of income taxes owed for the year in which they received the back paid benefits.
We say “potentially” because many Social Security disability benefit recipients don’t pay taxes because their income is too low, even with the back pay included. If the recipient is an individual and makes less than $25,000 (including income and SSA back pay), they won’t owe any taxes for their SSA back payment; the amount is $32,000 for married couples who file jointly.
There are two ways for beneficiaries to determine the amount of income to include: they can use their current year’s income to determine the taxable part of the total benefits received in the current year; or they can elect to figure the taxable amount of a Social Security disability back pay payment for an earlier year separately, based on their income for the earlier year.
Get the Disability Benefits You Deserve
Marc Whitehead & Associates have helped individuals all over the U.S. obtain the disability benefits they deserve from the Social Security Administration, the Veterans Administration, and private insurance companies. We assist persons with disabilities at all levels of the claims process.
If your claim for disability benefits has been turned down, we can help you file a successful appeal. In many instances, a claim is rejected not because the applicant doesn’t qualify for benefits but simply because they failed to provide the SSA, VA or insurance company with the necessary information needed to make a decision. We’ll make sure to submit all the documentation (medical records, doctors’ reports, imaging results, lab results, etc.) required to support your claim of disability.
Call Marc Whitehead & Associates at 800-562-9830 to schedule a free, no-obligation, initial consultation with one of our highly experienced disability benefits lawyers to discuss your claim. We are based in Houston, TX and serve clients all over the U.S.