Can a Tax Refund Affect SSI Eligibility?

by Clauson on May 9, 2018



If you are receiving supplemental security income from the Social Security Administration, your SSI is evaluated every month to determine if you are still eligible to receive SSI. Although receiving a state or federal tax refund usually doesn’t interfere with your SSI, the rules governing tax refunds and SSI are somewhat complicated.

Tax Refund and SSI

When Does a Tax Refund Affect Supplemental Security Income Payments?

Advanced tax credits and state and federal tax refunds do not need to be included in an SSI recipient’s resource limit. However, if the refund has not been spent within one year of receiving it and the SSI recipient goes over their allowable resources amount, they could lose part or all of their benefits. Additionally, refunds from child tax credits or earned income tax credits are exempt from mandated reporting for nine months after receiving the refunds.

Other types of income that the SSI program does not consider “true” income includes:

  • Assistance for food through the Supplemental Nutrition Assistance Program
  • Home energy assistance
  • Small amounts of money that are infrequently or irregularly received
  • Scholarships, grants or gifts meant to pay for educational expenses and tuition
  • Loans that require repayment
  • Earnings up to $7350 a year ($1820 a month) for students under 22 years of age

Tax Refunds and SSI Overpayments

The Social Security Administration considers an overpayment to be a monthly payment a recipient should not have been paid because they earned a certain amount of income for that month. If an SSI recipient does not spend a tax refund for one year and receives a regular SSI payment, the SSA may consider that payment an overpayment and expect it to be repaid. Other causes of overpayments include unreported changes in income due to marital or living status changes that exceed the SSI income limit, neglecting to report changes in a timely manner and mistakes made by the SSA.

To ensure you do not receive overpayments that must be repaid due to a tax refund, consult with a supplemental security income lawyer who is knowledgeable about complicated SSI guidelines.

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