Disability Exchange

SSI Income Exclusions in 2026

By Anthony Albert, Benefits Research Director at Disability Exchange · Published 2026-08-07 · 13-minute read

SSI is means-tested. Your monthly payment depends on how much countable income you have. But SSA doesn't count every dollar of income. There's a set of exclusions built into the rules that reduce your countable income and preserve more of your check. This article walks through the 2026 income exclusion framework, the math, and where cases go wrong.

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The 2026 numbers you need first

Anchoring 2026 SSI figures per SSA published data:

These get updated each year with the COLA. 2026 FBR reflects the 2.5% COLA applied to 2025's $943 individual FBR (2025 individual FBR was $943 with COLA 2.5% giving approximately $966.58, rounded to $967).

How SSI counts income

SSA separates income into four categories:

  1. Earned income: Wages, self-employment income, honoraria, sheltered workshop payments.
  2. Unearned income: Social Security benefits (SSDI/retirement), unemployment, pensions, alimony, gifts, dividends, interest.
  3. In-kind support and maintenance (ISM): Food or shelter someone else pays for on your behalf.
  4. Deemed income: Income of a spouse or parent that SSA treats as available to you.

Countable income determines your SSI check. The formula (simplified):

Monthly SSI payment = FBR - Countable income

If your countable income equals or exceeds the FBR, you get no SSI. If your countable income is $200, your SSI check is $967 - $200 = $767.

The $20 general income exclusion

Under 20 CFR 416.1112(c)(1), the first $20/month of any income (earned or unearned) is excluded. Just one $20 exclusion per household, not per person. This is a floor.

Example: You receive $500/month from a small pension (unearned income). Countable unearned income is $500 - $20 = $480. Your SSI payment is $967 - $480 = $487.

If you also had earned income that month, the $20 exclusion would already be used against the pension. Earned income would then only benefit from the $65 earned exclusion (not another $20).

The $65 earned income exclusion

Under 20 CFR 416.1112(c)(4), the first $65 of earned income each month is excluded. This is on top of any remaining $20 general exclusion. So if all your income is earned, you effectively get a $85 combined exclusion ($20 + $65).

The one-half remainder rule

After the $20 and $65 exclusions, SSA only counts half of your remaining earned income. Under 20 CFR 416.1112(c)(5), one-half of earned income above $65 is excluded.

Full formula for earned-income-only case:

  1. Start with gross monthly earnings
  2. Subtract $20 (general exclusion)
  3. Subtract $65 (earned exclusion)
  4. Divide remainder by 2
  5. Result is countable earned income
  6. SSI payment = FBR - countable earned income

Worked examples

Example 1: You earn $500/month.

Example 2: You earn $1,200/month.

Example 3: You earn $2,000/month.

Example 4: You earn $2,020/month.

The break-even earnings threshold in 2026 is roughly $2,019/month. Above that, SSI drops to zero for a single individual with no other income. But you may still be eligible for 1619(b) Medicaid continuation (see below).

Combined earned and unearned income

If you have both earned and unearned income, the $20 exclusion is applied to unearned income first. Any leftover goes against earned income.

Example: You get $200/month in SSDI (unearned) and $500/month in wages.

In-kind support and maintenance (ISM)

ISM is food or shelter provided free (or below market value) by someone else. Under 20 CFR 416.1130, ISM counts as income to SSA.

Two ISM rules:

One-third reduction (VTR) rule

If you live in someone else's household and receive both food and shelter from them, SSA reduces your FBR by one-third. Under 20 CFR 416.1131, this is the Value of the One-Third Reduction (VTR) rule.

2026 VTR: Your effective FBR becomes $967 - ($967 / 3) = $967 - $322 = $645 (approximately, since SSA also subtracts the one-third from countable income, the math gets complex). Practical impact: you get about $322 less in SSI per month if VTR applies.

VTR applies when:

Important 2024 policy change: SSA published a rule in April 2024 (effective September 30, 2024) removing food from ISM calculations. That means food-only ISM no longer counts. But shelter-only or combined food-and-shelter ISM still counts under different rules.

Presumed Maximum Value (PMV) rule

Under 20 CFR 416.1140, if ISM does not fit the VTR rule (e.g., you own or rent your home but someone else pays for the utilities), SSA counts the smaller of the actual value of the ISM or the Presumed Maximum Value.

2026 PMV: One-third of the FBR plus $20 = ($967 / 3) + $20 = approximately $342.

So if a family member pays your $500 utility bill, SSA counts $342 (the PMV) as your ISM, not the full $500. But the $342 counts as unearned income, reducing your SSI check.

Student Earned Income Exclusion (SEIE)

If you are under 22 and regularly attending school, the SEIE excludes up to $2,350/month of earned income, capped at $9,460/year (2026 numbers). This exclusion is on top of the $20 and $65 exclusions.

Example: You are 19, in college full-time, earning $1,500/month at a part-time job.

SEIE is a big deal for young adults on SSI who work part-time in school.

PASS plans

A Plan to Achieve Self-Support (PASS) under 20 CFR 416.1180 lets you set aside income or resources for a specific work goal. The set-aside money doesn't count against SSI eligibility or payment amount.

PASS examples:

PASS plans must be written, approved by SSA, and time-limited (usually 3 years). They're underutilized but powerful for beneficiaries with work goals.

Impairment-Related Work Expenses (IRWE)

Under 20 CFR 416.976, IRWEs are out-of-pocket expenses you pay for items or services you need to work because of your impairment. These reduce countable earned income further.

IRWE examples:

IRWEs are subtracted from earned income before the one-half remainder rule applies, so the effect is roughly double the dollar value. This is a big tool for higher-earning SSI recipients.

Section 1619(b) Medicaid continuation

Under 20 CFR 416.1338, if your earnings push your SSI to zero, you can keep Medicaid eligibility under Section 1619(b) as long as your gross earnings stay under your state's threshold. Thresholds vary by state and reflect the average cost of Medicaid services in that state.

2026 1619(b) thresholds (approximate, state-published):

1619(b) is critical because losing Medicaid can outweigh the earnings from work. Many SSI recipients strategically stay under the 1619(b) threshold to preserve health coverage.

Deeming income from parents or spouse

Under 20 CFR 416.1160, income of a parent (for a child under 18) or spouse can be "deemed" available to the SSI recipient, reducing benefits. Deeming rules are complex. See a benefits counselor if you're a child with working parents or a spouse of a working partner.

Common income exclusion mistakes

  1. Reporting gross wages instead of net. SSA needs gross wages. You report them, and SSA applies the exclusions.
  2. Forgetting IRWEs. Many SSI recipients don't claim IRWEs they're entitled to. This is money left on the table.
  3. Not tracking SEIE. If you're under 22 and in school, SEIE can eliminate almost all countable earned income up to the monthly cap.
  4. Missing PASS opportunities. If you have a specific work goal, PASS can save significant income and resources.
  5. Ignoring ISM changes since 2024. Food no longer counts as ISM. If SSA reduced your check based on food ISM before September 30, 2024, you may be entitled to correction.
  6. Not tracking 1619(b) threshold. Crossing your state's 1619(b) threshold can end Medicaid, which usually costs more than the extra earnings.

Excluded income types (never counted)

Some types of income are excluded entirely under 20 CFR 416.1124. These never affect your SSI check no matter how much you receive:

Resources vs income confusion

SSA distinguishes between income and resources. Income is money received in a given month. Resources are assets you hold (savings accounts, property, vehicles). The 2026 resource limit is $2,000 for an individual and $3,000 for a couple.

Money you receive during the month is income that month. Any of that money you still have at the start of the next month becomes a resource. This is why lump-sum payments can create problems: the lump sum counts as income the month you receive it, and if you don't spend it, it counts as a resource the next month, potentially pushing you over the $2,000 limit.

Special rules exist for lump-sum retroactive SSI and SSDI payments. Under 20 CFR 416.1233, retroactive lump sums are excluded from resources for 9 months. That gives you time to spend down without losing eligibility.

ABLE accounts

Achieving a Better Life Experience (ABLE) accounts under Section 529A of the tax code let people with disabilities save up to $19,000/year (2026 contribution limit) without affecting SSI eligibility. The first $100,000 in an ABLE account doesn't count as a resource. Balances above $100,000 still count.

ABLE accounts are one of the most powerful tools for SSI recipients who want to save without losing benefits. If you're on SSI and receive gifts, inheritance, tax refunds, or any lump sums, moving that money into an ABLE account preserves eligibility.

How to report income to SSA

You must report income to SSA by the 10th day of the month after you receive it. Report through:

Failure to report can lead to overpayments. Overpayments must be paid back, usually through reduced future SSI checks. In serious cases, overpayments can lead to SSI termination or fraud investigation.

Overpayments from unreported income

The most common SSI problem is overpayment. Someone starts a job, forgets to report, and 6 months later gets a letter demanding $4,000 back. Under 20 CFR 416.550, overpayments can sometimes be waived if you're not at fault and repayment would defeat the purpose of SSI or be against equity and good conscience.

Waiver requests use form SSA-632. Requests for reconsideration on the overpayment amount use SSA-561. Both should be filed within 60 days.

How this connects to SSDI and other benefits

If you receive both SSDI and SSI (concurrent), the SSDI counts as unearned income and reduces your SSI dollar for dollar (after the $20 exclusion). See our closed period SSDI article for how concurrent claims work in closed period cases.

State-specific SSI notes

Several states supplement the federal SSI benefit with a state supplement. California, New York, and Massachusetts have among the largest supplements. See state pages for details: California, New York, Massachusetts, Pennsylvania, Ohio.

FAQ

What is the SSI general income exclusion in 2026?

$20/month of any income (earned or unearned) is excluded first. One $20 exclusion per household per month.

What is the SSI earned income exclusion in 2026?

$65/month of earned income is excluded on top of the $20 general exclusion. So if all your income is earned, the combined exclusion is $85.

How does the one-half remainder rule work?

After the $20 and $65 exclusions, only half of your remaining earned income counts as countable income for SSI. This lets you keep more of what you earn.

What is in-kind support and maintenance?

Food or shelter provided free or at reduced cost by someone else. As of September 30, 2024, SSA excluded food from ISM. Shelter-only or combined food-and-shelter ISM still counts.

What is the Value of the One-Third Reduction rule?

If you live in another person's household and receive both food and shelter from them, SSA reduces your effective FBR by one-third under 20 CFR 416.1131.

What is the Student Earned Income Exclusion?

If you are under 22 and regularly attending school, up to $2,350/month of earned income is excluded, with an annual cap of $9,460 in 2026.

What is Section 1619(b)?

Under 20 CFR 416.1338, if your earnings zero out your SSI check, you can keep Medicaid eligibility as long as gross earnings stay under your state's 1619(b) threshold.

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Legal disclaimer: This article provides general information about SSA rules and is not legal advice. Individual case facts vary. Consult a licensed disability attorney, benefits counselor, or accredited representative for advice on your specific claim.

Disclosure: This is a privately owned website and is not affiliated with or endorsed by the Social Security Administration (SSA). Disability Exchange is an independent information resource. Information here is educational and not legal advice.