Is Social Security Disability Taxable in North Carolina? 2025

Social Security Disability benefits are an important resource for many Americans. These benefits can provide ongoing economic security when an individual has been injured at work and is unable to continue working. However, one may wonder, “Is Social Security Disability taxable in North Carolina?” Many types of benefits qualify as taxable at the federal and/or state levels, so it’s important to know what to expect with your benefits.

Is Social Security Disability Taxable in North Carolina?

The short answer to this is no: Social Security Disability benefits are not taxable in North Carolina. However, it applies at the state level. It is possible for an individual to be required to pay federal income taxes on their Social Security Disability benefits, but this will usually be based on the total income they receive in addition to their Social Security Disability benefits.

According to TurboTax, Social Security Disability Insurance (SSDI) may only be taxed if you receive income from other sources. These sources could include your spouse’s income as well as dividends or tax-exempt interest. If you are married and file jointly with your spouse, you will only need to pay federal income taxes on your SSDI benefits if half of your SSDI benefits plus your other taxable income is more than $32,000.

For those filing as single, qualifying surviving spouse, head of household, or married filing separately and who do not live with their spouse, the income threshold for half of your SSDI plus all other taxable income is $25,000 before you would have to pay federal taxes on your SSDI benefits.

North Carolina does impose a state income tax, and you may also be required to pay taxes on your other sources of income. Many people struggle to balance maximizing their benefits with their tax obligations, and it is possible for an individual to qualify for multiple forms of benefits following an injury at work. It’s important to consult professional assistance when it comes to your disability claims and for addressing your tax concerns in North Carolina.

What to Expect When Filing for Social Security Disability Benefits

If you were seriously injured at work and will be unable to work for an extended period, it’s worth talking to an experienced attorney about your eligibility for Social Security Disability benefits. Even if you already receive workers’ compensation benefits due to your inability to work, it is also possible to qualify for SSDI.

You must have paid into the Social Security system through your previous years at work, and you will also need to account for any income your spouse earns, as well as other forms of income, when it comes to determining your tax obligations. Working with a seasoned tax professional is the optimal way to ensure you do not incur any penalties for underpayment.

The team at Bridgman Gantt Law Offices regularly assists injured clients throughout North Carolina with workers’ compensation claims and Social Security Disability claims. We can help you understand the eligibility requirements and navigate the complex filing process with confidence. We can also be ready to assist you if you encounter disputes with your claim or if you have questions about your SSDI benefits that may affect your tax obligations.

FAQs

Q: How Much of My Social Security Disability Is Taxable in North Carolina?

A: Social Security Disability is only taxable under certain conditions. In North Carolina, Social Security Disability is not taxable, but you may be required to pay taxes at the federal level, depending on your total taxable income. It is important to work with an experienced tax professional to ensure you fully understand your tax obligations and what benefits you have that are taxable at the state level.

Q: Can I Get a Tax Refund if My Only Income Is Social Security Disability?

A: You may not need to worry about a tax refund if your only income is Social Security Disability. Additionally, you may not need to start a return if this is your only income, as Social Security Disability is only taxed at the federal level if you have other income that meets certain thresholds. If you are unsure about your tax obligations when you only receive Social Security Disability as a single source of income, consult a tax professional.

Q: Should I Have Taxes Withheld From My Social Security Disability?

A: In North Carolina, you may choose to have taxes withheld from your Social Security Disability if you believe you will meet the income requirement to pay taxes. Having taxes withheld can reduce the amount you are required to pay at filing time or increase the refund you are eligible to receive. Consult an experienced tax professional who can help you determine what level of withholding would be most prudent for your situation.

Q: What Is the 5-Year Rule for Social Security Disability?

A: The 5-Year Rule for Social Security Disability requires that you have worked for at least five of the 10 years immediately before you became disabled, and you must have paid Social Security taxes on your earnings during those five years to qualify for benefits. The purpose of this rule is to ensure that only those who have paid into the Social Security system receive these benefits.

Q: Should I Hire a Lawyer to Start a Claim for Social Security Disability in North Carolina?

A: It’s a good idea to hire a lawyer to help you file a claim for Social Security Disability. The claim filing process is notoriously difficult, and many first applications are rejected. In fact, many claimants will go through multiple rounds of rejected applications and refiling before they are finally approved. Working with a lawyer can greatly increase your chances of success with your claim, and your lawyer will be ready to respond for you if your claim is denied.

The Social Security Disability system can be a valuable economic lifeline to anyone who has been severely injured at work, but obtaining benefits can be incredibly difficult. The team at Bridgman Gantt Law Offices has helped many clients navigate the Social Security Disability claim filing process in North Carolina and can put this experience to work for you. Contact us today to schedule a free consultation and learn how we can help.

See Related Posts:

• Are You Likely to Qualify for Social Security Benefits?
• Social Security Benefits: Accurately Describing Your Condition
• Why Were My Social Security Disability Benefits Terminated?