This paper aims to develop response modification factors for stiffness degrading structures by incorporating soilstructure interaction effects. A comprehensive parametric study is conducted to investigate the effects of key SSI parameters, natural period of vibration, ductility demand and hysteretic behavior on the response modification factor of soil-structure systems. The nonlinear dynamic response of 6300 soil-structure systems are studied under two ensembles of accelograms including 20 recorded and 7 synthetic ground motions. It is concluded that neglecting the stiffness degradation of structures can results in up to 22% underestimation of inelastic strength demands in soil-structure systems, leading to an unexpected high level of ductility demand in the structures located on soft soil. Nonlinear regression analyses are then performed to derive a simplified expression for estimating ductility-dependent response modification factors for stiffness degrading soil-structure systems. The adequacy of the proposed expression is investigated through sensitivity analyses on nonlinear soil-structure systems under seven synthetic spectrum compatible earthquake ground motions. A good agreement is observed between the results of the predicted and the target ductility demands, demonstrating the adequacy of the expression proposed in this study to estimate the inelastic demands of SSI systems with stiffness degrading structures. It is observed that the maximum differences between the target and average target ductility demands was 15%, which is considered acceptable for practical design purposes.