Generally, no. In most cases, SSD and SSI payments are not taxable income. There are only a couple of exceptions when disability benefits may be taxed: Supplemental income limits. If you or your spouse receive SSD benefits in addition to another source of income, then your disability benefits may be partially taxed. If you earn between $25,000 and $34,000 as an individual (or a combined income of over $32,000 if married), then 50 percent of your SSD benefits will be taxed. If you earn over $34,000 as an individual (or $44,000 as a couple), then up to 85 percent of your disability benefits could be taxed. Lump sum back payments or death benefits. If you receive "back payments" in a lump sum for a period during which you were disabled but not receiving Social Security benefits, or a one-time death payment as the survivor of a worker receiving SSD benefits who has passed away, then these payments may be taxed for that year.