Oregon State taxing my social security

[thompms]

I moved to Oregon from Washington State in October 2024.  I received 3 months of social security after I moved to Oregon.  On the Turbotax "identifying Oregon source income" page it shows the full year social security  taxable amount in the federal column.  Am I supposed to enter the federally taxed amount for the three months I lived in Oregon, or do I enter $0 since Oregon does not tax social security.  If I do the former, turbotax taxes it.  If I enter $0 it does not tax it.  If I enter the 3 month amount, where does it get subtracted?

[xmasbaby0]

There are nine states that tax Social Security benefits.  Oregon is not one of them.

Colorado, Connecticut, Kansas, Minnesota,, Montana,, New Mexico, Rhode Island, Utah, and Vermont 

[thompms]

I understand that Oregon does not tax social security.  Why is turbotax asking for the Oregon portion of my taxable social security in the Oregon State Tax portion of this year's App?  On the Turbotax page entitled "Oregon Source Income and Adjustments" the last line is entitled "Unemployment. Social Security, and Other taxable income".  The full year taxable amount of my social security is pre-entered in the federal column and the Oregon column expects me to enter something.  If I enter 3 months of my taxable social security in that box Turbotax taxes it.  Is this a bug in the Oregon state tax portion of Turbotax or am I missing something?

[BrittanyS · Accepted solution]

Since Oregon does not tax social security, you would not list the 3 months of Social Security received while you lived in Oregon.  To correct in TurboTax you would enter 0 for the Oregon portion of federally taxable social security income.

Per the Oregon Department of Revenue, "Oregon doesn’t tax your Social Security benefits. Any Social Security benefits included in your federal adjusted gross income (AGI) are subtracted on your Oregon return."

@thompms 

• Is Social Security Taxable in Oregon?
• OR-40-P Instructions

[skydealer]

I second this problem.  Turbotax has errors for this year on the Oregon state tax.

I am also a partial resident, moved from GA to Oregon in July.  Under the income portion it specifically asks what part of my social security was earned in Oregon and which part was earned in Georgia.  It then taxes that portion I put down as per what the software required and it deducted the tax on the amount, even though Oregon does not tax SS.

In addition, it went through my federal return and asked which portion for my IRA distribution and my pension was earned in Oregon.  I entered in the required income percentage that was earned for Oregon.

The next page lists wages, the SS, taxable interest, dividends, and wages.  Hit continue and it goes to where you enter the portion of your Retirement Income (the total of where it asked about IRA distribution and pension as stated above.  

Do this, and it comes up with an error on form 40P, line 19, because none was entered.  When you go back and enter the portion of your social security earned while being a resident of Oregon, it taxes it.  This is wrong because it should not be taxed!  This needs fixed in the software.  I'm using the home & business edition.

[RogerD1]

The Oregon Form 40P that is used for part year residents has a section for Subtractions for lines 32 to 34.  Even though line 19(S) is supposed to include the amount of SS benefits apportioned to Oregon, the Oregon Form ASC NP that is used for adjustments does not have any code assigned to non-taxable Social Security income as a subtraction!  This is why Social Security is not being subtracted on the Oregon form.

When you are entering information in the Oregon Source Income and Adjustments section to apportion your Federal income amounts that were earned in Oregon, exclude the Oregon portion amount of Social Security income from the Unemployment, Social Security, and Other Taxable Income area.  If the only income for that box is Social Security income, then enter a zero in that box.  This will allow the Social Security amount apportioned to Oregon to be correctly non-taxable.

I did a mock return using the desktop version of TurboTax and followed the above guidance and this did result in a 0 for the Oregon portion of taxable Social Security and there was no error associated with that entry.