Yes, you can own a business while receiving disability benefits—but the rules are different for SSI and SSDI. Understanding these rules can help you earn income while protecting your benefits.
In this article, we'll cover:
- Self-employment rules for SSDI
- Self-employment rules for SSI
- How business income is counted
- Protecting your benefits
- PASS plans for starting a business
Self-Employment Rules for SSDI
The key question: Substantial Gainful Activity (SGA)
- In 2025, SGA is $1,620/month for most people
- $2,700/month if you're blind
- Earning over SGA can end SSDI
- But there are protections
Trial Work Period (TWP):
- 9 months to test your ability to work
- Can earn any amount during TWP
- Doesn't have to be consecutive
- A TWP month in 2025 = earning over $1,110
Extended Period of Eligibility:
- 36 months after TWP
- Benefits paid for months under SGA
- Benefits suspended for months over SGA
- Safety net for fluctuating income
How self-employment income is evaluated:
- Net earnings after business expenses
- Also consider time spent, skills, and work done
- SSA uses different tests for self-employment
- May be evaluated differently than employee wages
Self-Employment Rules for SSI
No SGA limit for SSI:
- SSI doesn't use SGA the same way
- Income affects benefit amount
- Resource limits still apply
- Can work and receive partial SSI
How earned income affects SSI:
- First $65/month excluded
- Then SSI reduced by $1 for every $2 earned
- You keep more than half your earnings
- Plus work incentives can help more
Self-employment income calculation:
- Net self-employment income counts
- Gross income minus business expenses
- Monthly average if income varies
- Different from employee wages
Resource limit considerations:
- Business assets may count toward $2,000 limit
- Property essential to self-support may be excluded
- Equipment needed for business may be exempt
- Consult SSA about your specific situation
How Business Income Is Counted
For SSDI:
Three tests SSA uses:
- Significant services test - How much work do you do?
- Comparability test - Is your work comparable to others?
- Worth of work test - Is your work worth SGA level?
Business expenses deducted:
- Supplies and materials
- Equipment
- Rent for business space
- Employee wages
- Marketing costs
- Other legitimate expenses
For SSI:
Calculating net self-employment income:
- Start with gross income
- Subtract allowable business expenses
- The remainder is countable income
- Monthly average for irregular income
Expenses that reduce countable income:
- Cost of goods sold
- Business rent
- Supplies
- Equipment (may be spread over time)
- Business insurance
- Marketing expenses
Protecting Your Benefits
For SSDI recipients:
Use work incentives:
- Trial Work Period wisely
- Impairment-Related Work Expenses (IRWE)
- Subsidy and special conditions
- Unsuccessful work attempt provisions
Plan carefully:
- Track your earnings monthly
- Know when you're approaching SGA
- Use business structure strategically
- Consider timing of income
For SSI recipients:
Maximize exclusions:
- $65 earned income exclusion
- Impairment-Related Work Expenses
- Blind Work Expenses (if applicable)
- Student Earned Income Exclusion (if eligible)
Manage resources:
- Keep business accounts separate
- Understand what assets are excluded
- Property essential to self-support rules
- Don't exceed $2,000 limit
PASS Plans for Starting a Business
What is PASS?
- Plan to Achieve Self-Support
- SSA-approved plan for SSI recipients
- Set aside money for work goal
- Money doesn't count as income or resource
Using PASS to start a business:
- Write a plan for business startup
- Identify costs (equipment, training, inventory)
- Set aside income/resources for plan
- Get plan approved by SSA
What PASS can cover:
- Business equipment
- Training or education
- Initial inventory
- Business licenses and fees
- Marketing materials
- Vehicle for business
Benefits of PASS:
- Save money without affecting SSI
- Invest in your business
- Work toward self-sufficiency
- SSA supports your goal
Business Structure Considerations
Sole proprietorship:
- Simplest structure
- Income flows directly to you
- All income counted for benefits
- Personal liability
LLC:
- Separation from personal assets
- Income still flows to you
- May provide some protection
- Consult tax professional
Corporation:
- Most separation
- You'd receive wages as employee
- More complex
- May have different benefit implications
Get professional advice:
- Tax professional
- Benefits counselor
- Business attorney
- PASS cadre at SSA
Reporting Requirements
Report to SSA:
- When you start a business
- Monthly self-employment earnings
- Changes in business activity
- Business expenses (keep records)
Keep records:
- Income documentation
- Expense receipts
- Bank statements
- Tax returns
Be honest:
- Underreporting is fraud
- Can result in overpayments
- May lose benefits entirely
- Criminal penalties possible
Getting Help
Free resources:
- WIPA (Work Incentives Planning and Assistance)
- PASS cadres at SSA
- Ticket to Work program
- Small Business Administration
What WIPA can help with:
- Understanding work incentives
- Planning self-employment
- Calculating benefit impacts
- Developing a strategy
How Purple Helps
Purple supports your business journey:
- Separate tracking for business income
- See all your money in one place
- Get benefits early to invest in your business
- No minimum balance requirements
- Simple expense tracking
With Purple, managing your benefits while building a business is easier.