SSD for Self-Employed Workers: What You Need to Know

Self-employed workers face unique challenges when applying for Social Security Disability benefits. Unlike traditional employees, they do not have an employer who pays Social Security taxes on their behalf. This can make the application process seem complicated. However, it’s important to know that self-employed individuals can still qualify for Social Security Disability (SSD) benefits if they meet certain requirements.

Understanding how SSD works for the self-employed is critical. Here’s what you need to know to navigate the system and increase your chances of a successful claim.

How SSD Works for Self-Employed Workers

When you work for yourself, you are responsible for paying both the employee and employer portions of Social Security taxes through self-employment taxes. These taxes fund Social Security programs, including Social Security Disability Insurance (SSDI).

In order to qualify for SSD benefits, you need to have worked and paid into Social Security for a certain number of years. The amount you need to work depends on your age. Typically, the Social Security Administration (SSA) requires that you have earned at least 40 work credits, 20 of which must have been earned in the last 10 years before becoming disabled. However, younger workers may need fewer credits.

If you’re self-employed, you still earn work credits when you pay self-employment taxes. However, there can be differences in how your earnings are reported and calculated compared to traditional employees. As a self-employed individual, you report your income through your federal tax returns. If you haven’t been paying enough in self-employment taxes, it could affect your eligibility for benefits.

The Role of Your Tax Returns in the SSD Process

Your tax returns are a critical part of the SSD application process. The SSA uses your income reported on your tax returns to determine your work credits. You’ll need to submit copies of your tax returns, typically from the past few years, to demonstrate your work history and earnings.

Self-employed workers often face challenges when it comes to reporting income. Many self-employed individuals claim deductions for business expenses that can lower their taxable income. While this is perfectly legal, these deductions can affect the amount of Social Security taxes paid. If your income is reported as too low because of deductions, it could impact your ability to qualify for SSD benefits.

If you’re applying for SSD, it’s a good idea to review your tax returns carefully. If you have reported low earnings due to deductions, you may want to consider whether those deductions are essential for your business, or if adjusting them could help improve your chances of qualifying for SSD benefits.

Proving Disability as a Self-Employed Worker

Proving disability for self-employed individuals can be more complex than for traditional workers. The SSA wants to know that you are unable to engage in substantial gainful activity (SGA) due to your medical condition. This means that even if you can perform some work tasks, if you are not able to earn a certain amount of income (the SGA threshold), you may still qualify for SSD.

For the year 2025, the SGA threshold is $1,470 per month for non-blind applicants. If your income from self-employment exceeds this amount, you may not be considered disabled under SSA rules, even if you are unable to perform the work you used to do. However, if your earnings are below this threshold, you might still meet the SSA’s criteria for disability.

In addition to proving your earnings, you will need to provide medical evidence supporting your disability. This can include doctors’ reports, hospital records, test results, and more. The more thorough and recent the medical documentation, the better your chances of being approved for SSD benefits.

Special Considerations for Self-Employed Workers

There are a few unique factors that can impact self-employed workers’ SSD claims. First, the SSA will assess whether you can still perform your job duties in some capacity. If you own your own business, you may be able to argue that, while you can still manage the business, your disability prevents you from performing essential tasks, such as physical labor, customer interaction, or managing finances.

Another consideration is the issue of work adjustments. For example, some self-employed workers may attempt to adjust their work schedules or duties in an attempt to continue working while managing their disability. The SSA will want to know whether these adjustments are substantial enough to reduce your earnings below the SGA threshold or to impact your ability to work as you did before your disability.

Lastly, the SSA will examine whether your disability has affected your ability to run your business. If you are able to continue working at reduced capacity but are no longer able to make a reasonable living, you may still be considered disabled.

Working with an SSD Lawyer

The process of applying for SSD benefits can be overwhelming, especially for self-employed workers. Gathering medical evidence, submitting tax returns, and proving your inability to engage in substantial gainful activity can be complicated. An experienced SSD lawyer can help you navigate the application process, ensuring that all necessary information is submitted correctly and promptly.

An SSD lawyer can also help you understand your rights, appeal a denied claim, and increase your chances of approval. In many cases, self-employed workers are denied benefits due to errors in the application process or failure to meet the SSA’s criteria. Having legal representation can help ensure that you are presenting the strongest possible case.

Conclusion

Self-employed workers are entitled to Social Security Disability benefits just like employees. However, the process can be more complicated due to the way income is reported and the unique nature of self-employment. By understanding the requirements and preparing the necessary documentation, self-employed individuals can increase their chances of receiving the benefits they deserve.

If you’re struggling to navigate the SSD application process as a self-employed worker, consider reaching out to an experienced attorney. They can help you understand your options, avoid costly mistakes, and improve your chances of success.