Taxpayer (37 years old) and Spouse (39 years old) with 2 dependents (17 and 12 years old) 

Taxpayer has a w2 $35,000

Spouse has SSA-1099 Box 5 red box $22,236 says it is disability payment and doesn't think they have to report it. Do they not have to add this? When I put it in $8,000 of it gets taxed

Each dependent has a SSA-1099 box 5 for $5,402 

Thank you for your help