A good percentage of people face garnishment on their payroll checks. And in theory, everyone should be paying taxes on their income. But what happens when you’re on Social Security disability? Technically, SSDI is something that you’ve paid into for a long time and that you should have access to without the fear of garnishment or excessive taxes. That’s not the case for everyone because there are situations where you may pay taxes, and there are situations where a garnishment can go into effect against an SSDI check.
To get support and learn how possible disability garnishments and taxes apply to you, it’s best to get an experienced Milwaukee SSDI attorney. You’ll want someone who’s well versed in Milwaukee SSDI policy and law. But we’ve all heard some general insight here to help you gain some understanding of how the processes usually take place.
Is SSDI Taxable Income?
In most situations, SSDI is not taxable. SSDI benefits come from the Social Security Administration, and these benefits are dependent on your work history and what you’ve paid into SSI benefits over the years. By and large, SSI and SSDI benefits aren’t taxable.
However, that said, there are income limits and situations where your SSDI could be taxed. For example, if you are working and your spouse is on disability, then those benefits may be taxed because of the household’s income level. Most people that earn enough for SSDI taxation don’t qualify for SSDI benefits. The income brackets of earning over $44,000 if married are generally easy to hit, and that would result in SSDI denial or benefit taxation.
Can Your Social Security Be Garnished?
Yes, just like a paycheck, your Social Security disability can go under garnishment. After going from your standard paycheck to a disability check, it may take some time for that garnishment to transfer over. So many people are surprised when they go from receiving full benefits to benefits reduced between 15 and 60%.
For court-ordered garnishments, the cap is usually 15%. That includes a garnishment for federal income taxes, or you may owe the IRS for past years. However, the more common garnishment that doesn’t go through a court order is for student loans. There are very specific guidelines on how federal student loans and privatized student loans can implement a garnishment and how much it can impact your take-home benefits.
For example, with student loans, they can garnish up to 15% of your disability benefits. However, they won’t leave you with less than $750 each month.
When it comes to court orders for things such as alimony or child support, the court work and goes up to 60% of your disability benefits. Now, if you’re more than 12 weeks late, they can add an additional 5% on to that garnishment. Keep in mind that it’s also possible for private companies, including creditors, to obtain a court-ordered garnishment. Usually, during that time, a judge is involved, and typically judges won’t go as high as 60% for a creditor even if it’s medical costs or a car loan.
Can An SSDI Attorney Stop a Garnishment or Tax?
While you certainly can’t stop taxes, you can fight a garnishment. For people on disability, usually, the goal is to get back to work, and disability is only a tool to help maintain financial stability. When it comes to garnishments, you can fight a garnishment, or request that it undergo a hold until you return to work. If you have a medical team that acknowledges a recovery within the next few months, this may be achievable.
Additionally, if the garnishment comes from a government office, you can usually go through that office for garnishment suspension. Some student loans allow for garnishment suspension after six months of on-time payments with payment negotiation.
Should You Call an SSI Disability Lawyer?
Working with an SSDI attorney is always recommended. Whether you’re just starting your application or you have a change, such as a garnishment order getting a consultation is vital. Wisconsin has an unusually high denial rate and often attempts to pay out much less than what their recipients need. So if you’re getting the bare minimum from SSDI and have a garnishment on top of that, life can be a struggle.
Tabak law is the local Milwaukee law office that helps resolve disability issues. Our team handles everything from applications to administrative law judge appeals and even answering questions about garnishment and taxes. Change where you stand with Wisconsin SSDI and bring in an attorney double fight for the benefits that you’re owed.