Typically, the U.S. Social Security Administration won’t consider a taxpayer’s tax refund for twelve months, but the individual may lose Supplemental Security Income (SSI) benefits if he or she earns or possesses too much money following that period.
SSI provides monthly payments to help individuals who are either blind, disabled, or elderly. To qualify for SSI, recipients are required to be low-income workers with minimal assets. Every month, the Social Security Administration (SSA) will assess individuals’ eligibility and determine if they qualify for SSI benefits.
While a tax refund may not be grounds for disqualification, there are some circumstances in which it may affect SSI.
How Tax Refunds Work with the SSI Resource Limit
The SSA determines SSI resources at the start of the first day of every month. Individuals with disabilities and others who qualify for SSI must not have any “countable resources” exceeding $2,000 in any month, while couples must not have resources over $3,000. These resources could include cash kept in bank accounts or personal items, with the exception of items that are considered exempt.
Some resources that SSA considers exempt include the applicant’s home, one vehicle, burial plots, some household items, and any life insurance policies in place worth no more than $1,500.
Refunds at both the state and federal levels are also exempt, along with advanced tax credits including health insurance premium supports, but these exemptions only last for twelve months. Payments from the child tax credit and earned income tax credit are also exempt for nine months following the date of receipt.
Individuals who don’t spend the tax refund within twelve months, and who possess over the permitted amount of resources, risk losing SSI benefits.
Tax Refunds and the Income Limit for SSI
The 2019 SSI income limit for individuals was $771 per month, while couples could earn up to $1,157. However, not all income counts toward this limit. For instance, the first $65 earned each month along with one-half of the wages exceeding that amount are exempt, while other exemptions also apply that can impact the income limit.
When it comes to refunds, both state and federal tax refunds are also exempt from countable income.
Taking this into account will help individuals and couples make sure that they still qualify for the SSI program if they receive a federal or state tax refund.
