Re: SSDI Award and LTD reimbursement. Getting Screwed?
I think you get screwed here in a way. Your math looks correct to me.
1. Prior to SSDI total income = your income + LTD
2. After SSDI total income = your income + offset LTD + SSSI - taxes on SSDI
1 > 2 unfortunately
* Not sure how the child's SSDI is treated but I would think SSA would view it as total household income and this would be taxable.
If so, your taxes would be 2250x.85x28% = 535
2250 - 535 + 250 = 1965
*It seems like you are now being taxed on the full LTD amount whereas before it was tax free. I personally don't think they should tax your wife's SSDI b/c of your income no matter how much you are making b/c your wife paid for the SSDI insurance with FICA taxes when she was working. Does not seem quite fair to me.