What is social security disability back pay?

The SSA must approve your fee agreement with a lawyer or advocate in advance, and the fee is generally capped at $9,200 or 25 percent of back pay, whichever is less. In the example above,

with past-due benefits totaling $13,000, your representative would get up to $3,250 off the top. You also can receive back pay for delays in applying for Supplemental Security Income (SSI),

the other Social Security–run program that pays benefits to people with disabilities. (In the case of SSI, you also must have very limited income and financial assets to qualify.) However,

the rules are a bit different. With SSI, the start of payments is tied to your application date, not your onset date. And SSI has no waiting period, so your back pay will be calculated

differently than for an SSDI claim. Also, if your past-due SSI is more than three times the program's maximum monthly payment ($967 in 2025), you won't get it in a lump sum.

Instead, it will come in three installments at six-month intervals. TAX IMPACT SSDI, like other Social Security benefit income, may be taxable if your overall income exceeds a certain level.

(SSI is never taxed.)  To minimize the chances of a large back payment pushing you over that threshold, the IRS lets you refigure back pay that accrued in a previous year into that

year's income for tax purposes, a method called “lump-sum election." Box 3 of your SSA-1099 tax form will show the yearly breakdown of any past-due benefits you received, and the

IRS publication “Social Security and Equivalent Railroad Retirement Benefits" has instructions for apportioning back pay into prior years to potentially reduce your tax burden. But the

formula is complicated, and you might want to use tax software or consult a tax professional if you choose to use lump-sum election. KEEP IN MIND * Back pay covers the months between

application and approval. Because SSDI eligibility technically begins with your disability onset date, you may be eligible for additional “retroactive” benefits if you became disabled well

before you applied. SSI is not retroactive. * A lawyer or advocate handling your disability claim may petition the SSA for a fee that exceeds the cap, particularly if an appeal goes beyond

the hearing level. If Social Security approves the petition, it still pays 25 percent of back pay to the representative. You are responsible for any additional fees.