Introduction Subjective cognitive decline (SCD) is a self-perceived decline in cognition that may progress to mild cognitive impairment or Alzheimer's disease. SCD may be associated with difficulties in daily functioning and psychological distress. Previous research has shown the association between functional difficulties and SCD via mentally unhealthy days (MUDs). However, whether income levels influence the mediation effect of MUDs is less understood. Objectives This study examined the association between subjective functional difficulties and the odds of SCD through MUDs, and whether the mediation effect was moderated by income levels. Methods Cross-sectional data were obtained from the 2019 Behavioral Risk Factor Surveillance System ( N = 13,160 older adults aged 65+; 7,370 women). SCD was assessed by more frequent or worse memory loss and confusion in the past 12 months. Subjective functional difficulties represented difficulties with daily activities. MUDs denoted the days that a person felt mentally unwell within the past 30 days. We used path analysis with 5,000 bootstrapped confidence intervals and logistic regression to classify the risks of SCD based on subjective functional difficulties and MUDs. Results Subjective functional difficulties were positively associated with SCD through mediation by MUDs ( b = 0.119, 95% CI 0.102, 0.137). After accounting for covariates, we found that greater subjective functional difficulties were associated with 2.50 times the odds of SCD (AOR = 2.50; 95% CI: 2.14, 2.91); MUDs were related to 1.06 times the odds of SCD reporting (AOR = 1.06; 95% CI: 1.05, 1.07). Income levels moderated the indirect effect of MUDs in the subjective functional difficulties-SCD relationship, with an income of <$15,000 showing the most prominent effect. Those earning ≥$50,000 self-reported a lower SCD than those earning <$15,000. Conclusions Our study extends previous findings by demonstrating that greater subjective functional difficulties are associated with higher odds of SCD through more frequent MUDs, with higher income levels being associated with more SCD reporting.