Do Gambling Winnings Affect Social Security Benefits

Benefits Paid Under Title II of the Social Security Act: TN 129 01-19: SI 00830.215: Black Lung Benefits: TN 103 04-09: SI 00830.220: Office of Personnel Management (Civil Service and Federal Employee Retirement System) Payments TN 88 02-02: SI 00830.225: Railroad Retirement Payments: TN 80 04-99: SI 00830.230. Taxable income that is received as a lump sum - such as gambling or lottery winnings, prizes or awards, employee back pay awarded in a settlement, retroactive unemployment insurance benefits, retroactive social security and railroad retirement benefits, or a lump sum distribution from a qualified retirement plan from the deceased’s employer.

  1. Neither the lottery nor the SS benefits will be subject to social security or medicare taxes. The lottery winning will not affect her social security benefit amount. The lottery winnings and some of her SS benefits will be subject to state and federal income taxes so she does need to file tax returns for both state and federal.
  2. July 28, 2020 No, lottery winnings do not affect your social security disability benefits (SSDI). But it can reduce or totally cut your Supplemental Security Income (SSI). That’s because SSDI is an earned benefit.
  3. If your lottery prize exceeds $5,000, the lottery agency must report your winnings to the Internal Revenue Service. The agency will need your Social Security Number to complete IRS Form W-2G. It will give you a copy and send the original - and 25 percent of your winnings - to the IRS.
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If you are getting SSDI - Social Security Disability Insurance benefits (and not SSI), then no, you do not have to report the winnings to Social Security. SSI is need based and requires that sort of notice. SSDI is based on what you earned and the taxes you paid, so it is a benefit you are entitled to regardless of any money you inherit or win at a lottery.
You may owe taxes on the winnings, but that is a tax question. I suggest you tal to a tax preparer about that issue.
Best of luck to you.

Do Gambling Winnings Affect Social Security Benefits Amount

The exact answers to questions like this require more information than presented. The answer(s) provided should be considered general information. The information provided by this is general advice, and is not legal advice. Viewing this information is not intended to create, and does not constitute, an attorney-client relationship. It is intended to educate the reader and a more definite answer should be based on a consultation with a lawyer. You should not take any action that might affect your claim without first seeking the professional opinion of an attorney. You should consult an attorney who can can ask all the appropriate questions and give legal advice based on the exact facts of your situation. The general information provided here does not create an attorney-client relationship.

The odds of winning the lottery are against you, but it could happen! If you do win the lottery, you might wonder how your Social Security Disability Insurance (SSDI) will change. Obviously, if you’ve won hundreds of millions of dollars, whatever benefits you received will pale in comparison. You probably won’t worry about losing out. However, you can win smaller amounts as well. For example, winning $1,000 is certainly nice, but how that could affect your Social Security benefits could be very worrisome. Because of this, you’ll want to learn how lottery winnings and SSDI benefits affect each other.

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Do Gambling Winnings Affect Social Security Benefits

Lottery Winnings and SSDI Benefits

The way SSDI benefits work is that if you experienced a mental or physical disability that prevents you from being able to work, and if you’ve paid your Social Security taxes while working, then SSDI will provide you with a monthly benefit payment. This payment isn’t the same for everyone. Instead, it’s based on what your income was. This means that you can qualify for SSDI benefits no matter what income bracket you belong to.


Although there are no income limits on being able to qualify for SSDI benefits, there are limits on how much money you can earn while you are on SSDI. This is because if you are capable enough to earn a certain amount of money, you won’t be considered disabled. This limit on how much you can earn changes year by year in order to keep up with inflation. This year (2019), non-blind applicants can’t earn more than $1,220 per month, and blind individuals can’t earn more than $2,040 per month.

However, only “earned income” applies to SSDI income limits. Unearned income, which includes any income earned from investments, interests, spouse’s income or lottery winnings, do not have any limits. This means that no matter how much money you win playing the lottery, your SSDI payments will remain the same. If you’re on Supplemental Security Income (SSI), however, then it will be affected.

Lottery Winnings and SSI Benefits

SSI is a bit different in that it provides supplemental income to disabled benefits who earn below a certain amount a year. SSDI is insurance, which you are paying for if you are paying Social Security taxes. SSI is a government welfare program. This means that the income limits are much more strict than those of the SSDI program.

In order to qualify for SSI, you have to have less than $2,000 in assets as an individual and less than $3,000 in assets as a couple. Individuals can make no more than $750 a month and couples can make no more than $1,125 a month. Unlike SSDI, this doesn’t just count “earned income.” This includes wages, money from investments, and lottery winnings. If you make over the limit, the Social Security Administration will take the amount that you went over and subtract it from SSI payments. This means that if you win a substantial amount of money playing the lottery, odds are you’ll no longer be able to collect SSI.

When it comes to lottery winnings and SSDI benefits, the amount you win should have no effect on your benefit payments. However, if you are on SSI as well, then there’s a good chance that you may no longer be able to collect those payments as a result of your lottery winnings. For more information on whether or not you qualify for SSDI payments, be sure to contact us anytime via phone at 602-952-3200 or by using our LiveChat feature. Consultations are free, so don’t wait; contact SSDA USA today!

Do Gambling Winnings Affect Social Security Benefits

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