Self-Employment and SSDI: 2025 Rules and Considerations

 Self-employment offers flexibility that can benefit many SSDI recipients, but understanding how the Social Security Administration evaluates business activities is essential to maintaining eligibility. The 2025 rules provide important guidelines for disabled entrepreneurs.

Unlike traditional employment, the SSA evaluates self-employment using three tests to determine if your work activity constitutes substantial gainful activity (SGA):

1. Significant Services and Substantial Income Test
   You're engaged in SGA if you provide significant services to your business and receive substantial income. In 2025, "substantial income" generally means net earnings after business expenses exceeding $1,620 monthly for non-blind individuals or $2,700 for blind individuals. However, even lower earnings might be considered substantial if they're comparable to what a non-disabled person would earn in your business or community.
2. Comparability Test
   Even without substantial income, your work may be SGA if your activity is comparable in terms of hours, skills, energy, efficiency, and duties to that of non-disabled individuals in your community doing similar work.
3. Worth of Work Test
   Your work may be SGA if it's clearly worth more than the 2025 SGA amount ($1,620/$2,700) when considering its value to your business and what it would cost to hire someone else to perform those duties.

For income reporting, several considerations apply:

• Report business activity to the SSA quarterly
• Maintain detailed records of income, expenses, and hours worked
• Document business losses and unprofitable periods
• Track unpaid assistance from family members or others
• Keep evidence of disability-related limitations affecting your business

Self-employed SSDI recipients can utilize several work incentives:

• The Trial Work Period applies to self-employment, with any month counting where you earn over $1,160 (2025) or work more than 80 hours
• Impairment-Related Work Expenses (IRWE) can be deducted from net earnings
• Unincurred Business Expenses (value of unpaid help or subsidized equipment) can be deducted when calculating SGA
• Unsuccessful Work Attempt provisions apply if you discontinue your business due to your disability

Structuring your business appropriately—such as forming an LLC or S-Corporation—can sometimes help separate business income from personal income in ways that better reflect your actual work activity. However, the SSA looks at the substance of your work contribution regardless of legal structure.

Working with both a knowledgeable accountant and a benefits counselor can help you structure your self-employment to maintain SSDI eligibility while pursuing entrepreneurial goals.