Legal Question in Disability Law in Illinois

Hello - My question is regarding taxes and medically disabled people. My husband became medically disabled in 2008 and since then we have experienced issues with the state and federal taxes whereby they say we owe each year. He is on SSDI and receives a 2100 a month payment from a long disability insurance policy. My question is why are these moneys taxable? SSDI and insurance payments are barely enough to pay for his medical and normal living expenses. The raising tax payments are killing us, is there any advise you can offer?

Asked on 10/14/12, 11:45 am

1 Answer from Attorneys

SSDI is taxable only if other income is also being received (from your husband or you), all in excess of $25,000.

If your total household income was under $25,000, you would not be subject to tax on the SSDI.

If the long term disability policy payments are taxable, then the SSDI would be subject to tax on 50% (up to $34,000 total income) and 85% of the SSDI payments if your income is over $34,000.

In order to avoid future penalties, you should contact the long term disability policy holder and request that they withhold taxes.

Good luck to you.

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Answered on 10/28/12, 9:56 am

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