Qualifying For Disability Benefits If You Do Not Pay Income Taxes

Posted on behalf of Dayes Law Firm PC on May 21, 2020 in SSD

disability benefits and income taxesWhen a disability recipient is getting paid under the table or off the books, perhaps to make additional wages, he or she is not paying taxes on this income. Doing so can jeopardize the recipient’s ability to receive disability benefits. This is because the Social Security Disability Insurance (SSDI) program requires meeting certain work history requirements. These requirements include recipients paying their taxes into the Social Security system.

Our disability lawyers at Dayes Law Firm further discuss why not paying income taxes may compromise your eligibility for disability benefits. We are ready to review your situation in a free legal consultation.

Not Paying Income Taxes

Generally, you are not paying income taxes if you are getting paid under the table. Payment is likely in cash and this money is not being reported to the Internal Revenue Service (IRS). Your employer may not even ask that required tax forms be completed.

Certain jobs, such as manual labor, handyman jobs, childcare and housekeeping jobs, may be more likely to pay under the table. Other jobs may pay a portion of your income off the books, especially when a significant portion of your income is derived from tips.

How Does This Affect Me From Getting SSDI Benefits?

To be eligible for SSDI benefits, you need a certain number of work credits (typically 40 work credits, 20 of those must have been earned in the last 10 years). These credits are earned by paying Social Security taxes on the income that you receive. You could earn up to four work credits a year.

If you are receiving full or partial payments under the table, not enough taxes are being paid, if at all, to earn the required work credits. It is vital that you report all income to the IRS and pay these taxes.

Exceptions for Eligibility for SSDI

In some situations, a recipient who is paid under the table may claim this income from being self-employed or as supplemental income on his or her tax return. This allows the recipient to pay Social Security taxes on this income and be able to earn enough work credits for SSDI benefits.  

You are more likely to earn work credits and be eligible for disability benefits if you are reporting this income on your taxes. You could even be eligible if you receive a portion of your income in a check.

Get Help Applying for a Disability Benefits

If you are unsure about your eligibility for disability benefits, do not hesitate to contact one of our Phoenix Social Security Disability lawyers at Dayes Law Firm. We know what it takes to increase one’s chances of getting approved and the reasons why applicants are often denied by the Social Security Administration.

We charge no upfront payment for our legal services and only collect if we help you obtain benefits.

Call our office today at 1-800-503-2000 to schedule your free consultation.

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