When you’re initially approved for Social Security Disability (SSD) benefits, you will likely feel a sense of relief – the application process is over, and you’re finally receiving the financial assistance you need. However, questions will eventually begin to arise. For instance, are social security benefits taxed? This is a commonly asked question, and the answer varies based on your income, the benefits you receive, and the state you live in.
IRS Provisional Income and SSD Taxation
Generally, if a beneficiary has a low income due to their inability to work, it is unlikely that their benefits will be taxed. However, when the income of those collecting exceeds a certain threshold, it may be subject to income tax. This is what the IRS calls a “provisional income,” which is the sum of your adjusted gross income, tax-exempt interest income, and half of your Social Security Disability benefits for a given year. This will determine if your benefits are subject to tax and, if so, how much.
For example, if those three figures add up to less than $25,000 as an individual taxpayer or $32,000 for a married couple filing jointly, you won’t pay taxes on your SSD benefits. However, if your provisional income is $25,000 to $34,000 for an individual or $32,000 to $44,000 for a married couple, 50 percent of your benefits are subject to taxation. If it’s more than $34,000 for an individual or $44,000 for a couple, you are taxed on 50 percent to 85 percent of your benefits. The specific amount taxed ultimately depends on your state of residence. You should contact a qualified tax advisor in your area with any questions you may have.
Is SSD in Oregon Tax-Exempt?
The answer is yes. Luckily, in Oregon, Social Security disability payments are tax-exempt. Although the state imposes taxes, it exempts 100% of Social Security Disability benefits from tax liability. So, if you are collecting disability benefits in Oregon, you will not have to worry about taxes coming out of your payments. If you have additional questions about Social Security Disability benefits in Oregon, the SSD attorneys at Kerr Robichaux & Carroll are here for you and happy to help.
Northwest SSD Attorneys Who Are Here for You
The SSD application and appeals processes are jarring to those unfamiliar. For those who have recently become disabled, it could be that much harder to navigate. This is why the SSD attorneys at Kerr Robichaux & Carroll are here to help. We take much pride in helping disabled persons in the Pacific Northwest thrive by securing the benefits they need.
Have you been recently disabled and are beginning to navigate the Social Security Disability application process? We’re here to help. Contact the experienced SSD attorneys at Kerr Robichaux & Carroll by submitting a contact form on our website or calling our office toll-free at 503-255-9092 for a free consultation today.