With only one month to go until April 15th, our focus has quickly shifted to this year’s tax preparations. From W-2s to 1099s, to 1040 mailings to tax preparer solicitations, we are bombarded with reminders of our obligations to both the federal and state governments – whether we like it or not!
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I recently received a call from a colleague about a situation that is all too common given the delays associated with the Social Security disability adjudication process – the death of a claimant prior to a final adjudication.
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I get a lot of questions from mothers who are caring for the children of fathers who are out of the picture. Susan's situation is a fairly common one so I will answer it here:
More on Will Child be Eligible for Dependent's Benefits When "Out of the Picture" Father is Approved
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In my law practice, I have handled both bankruptcy and Social Security disability cases. Unfortunately, with delays in the Social Security system approaching 3 years, more and more of my disability clients find themselves considering bankruptcy.
More on Will Filing a Bankruptcy Affect My Social Security Disability Case?
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dear jonathan: i have been recieving ssd since around 2002 and also recieving workers comp (lifetime settlement)i am 53 years old.there is also a small payment from my ltd carrier, in the past they requested 13,000 back in which i paid because of approvel of ssd.i would like to know if ssd will want repayment of any of this money back also, I am over the 80% amount of former salery. i feel traped in this situation .i did use a law firm from the start and they handeled it all but never advised me on the details i described. to date ssd has never requested information on any other payments recieved .your advice would be appreciated ..thank you jonathan i would think a ssd review could come up in the next year.
–Manny
More on How Do Workers Compensation Offsets Affect Social Security Disability Payments?
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how much do you recive from ss for 19 months backpay after your lawyer are paid?
–Etta
Jonathan Ginsberg responds: Etta, the calculation is as follows:
- create a column for each year that you are eligible for past due benefits
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Jonathan, I was recently approved for ssd by the ALJ. I had my 3 heart attacks, the last on May 5, 2005. At that time I became disabled to work. This has been my Doctors statement all along. Like a lot of people trying to get ssd, my financial situation got serious. I filed for an "on the record review" and after 6 months recieved a full favorable decision.
More on Claim Approved "On the Record" With Amended Onset Date – Should I Appeal the Changed Onset?
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I have found your site and have been reading your comments. I have been on SSDI since 2002. I was a registered nurse for 15 years- always working with no lapses. At on point I was working two full time jobs (no sleep). I worked the two full time jobs for about a year and 1/2. I earned a very decent living. I saw in one of your posts that SSDI is usually about $1500 a month. Mine started at $1200/month- now it is up to $1300/month. Why the difference in amounts? I would desperately like to go back to work- but it doesn't look good. Every penny counts now. In this situation does a person have any recall? Thanks.
–Deb
More on How Do I Know if my SSDI Monthly Benefit Payment Amount is Correct?
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This blog post is a little off topic but I have included it because it serves as a warning to SSDI claimants who are also collecting long term disability benefits. Thanks to Mike the gentlemen who wrote me to describe a problem he is having with his LTD carrier. Mike apparently had long term disability (LTD) coverage at the time he became unable to work. Many LTD policies, especially those provided as a benefit by your employer, contain provisions that (1) require you to apply for Social Security benefits and (2) that if you are approved and are awarded past due benefits, that you must repay the LTD carrier when you receive your lump sum back benefit check. In addition, going forward, your LTD benefit will be reduced by whatever you receive from SSDI.
More on LTD Carrier Misleads Claimant About Repayment Obligation – What Next?
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With delays in the Social Security decision making process reaching 3 years, those fortunate claimants who are approved will end up with large lump sum payments. I have seen several instances where the lump sum benefit check exceeded $50,000.
A question I hear more and more has to do with the tax implications of lump sum Social Security payments. I found a helpful article at the MarketWatch web site that gives a nice overview of Social Security disability benefits and taxes. This article was written by Eva Rosenberg a/k/a TaxMama.
Depending upon your household income, some of your SSDI payments may be treated as income for tax purposes. In 2007, for a husband and wife filing jointly, if you joint income (including your SSDI payment) falls below $32,000, 50% of your SSDI benefit is taxable. If you income exceeds $44,000 annually, 85% of your SSDI benefit is taxable.
Your lump sum SSDI payment is eligible for special treatment by the IRS – there are rules that allow you to spread out the taxes over several years. Rosenberg notes that the calculations pursuant to IRS Publication 915 can be complex, so you may want to engage the services of a CPA or enrolled agent to help you.
For more information check out Rosenberg's TaxMama.com site, which offers a great deal of useful and easy to understand tax help.
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More on Tax Treatment of SSDI Benefits and Lump Sum Payments
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