Does Oregon Tax Social Security?

The IRS taxes more than half of the Social Security Disability benefits received by beneficiaries living in Oregon.

Oregon residents can apply for disability benefits from the Social Security Administration (SSA). Disability payments replace the incomes of individuals who cannot earn incomes temporarily or permanently. However, based on the beneficiaries' total household incomes, the Internal Revenue Service (IRS) can consider their Social Security Disability benefits as taxable incomes.

Applying for Social Security Benefits in Oregon

Oregon applicants must meet the definitions of being disabled according to the SSA as well as meet working and earnings requirements. The SSA considers applicants disabled if their illnesses or injuries will keep them out of work for 12 months or longer or they are terminal. These disabilities must prevent applicants from doing their current jobs and adjusting to other types of work. Applicants must have the requirement number of work credits to qualify as well. As of February 2011, credits are earned for every $1,120 made annually up to a maximum of four per year. Normally applicants would need to have 40 credits with 20 coming within 10 years of becoming disabled. However, there are exceptions, such as younger workers who can still qualify if they become disabled and didn't meet the work credits requirement.

The Taxation of Social Security Disability Benefits in Oregon

Beneficiaries living in Oregon will have their SSA payments taxed by the IRS if their household incomes exceed the program's guidelines. For example, as of February 2011, individuals who have incomes totaling $25,000 and over will have 50 percent of their benefits taxed at normal income tax rates. If they make over $34,000, then it increases to 85 percent. For married couples, 50 percent of their SSA benefits are subject to taxation if they have household incomes that top $32,000 and 85 percent can be taxed if their earnings exceed $44,000.

Considerations

The SSA is strict when it comes to accepting applicants for coverage. Only 40 percent of first-time applicants are accepted, according to the Life and Health Insurance Foundation for Education. Also those who are accepted must wait at least five full months before receiving benefits from the time their disabilities start. Also the beneficiaries' children, spouses and ex-spouses can receive SSA Disability payments based on their earnings' records as well.

Information About Social Security for Oregon Residents

Oregon residents who meet the disability requirements of the Social Security Administration can seek information and guidance to apply for benefits at over 54 field offices in the Seattle region. Four states make up this region (Alaska, Washington, Idaho and Oregon) and are home to about 1.8 million people covered under Social Security Disability and other programs. Over $17 billion in Social Security Disability and other types of benefits are paid to beneficiaries living in Oregon and the other states in the Seattle region.

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