Oregon Source Income and Adjustments Question

[rememberkani]

I am on the page where I am asked to report Oregon source income. My spouse (married filing jointly) has social security disability income that is reported on our federal tax return. There is a box where I need to fill out how much "Unemployment, Social Security and Other Taxable Income" was earned in Oregon. When I click on "more information" to see what they mean by Social Security (such as if they are referring to disability, or unemployment wages or what they are asking for), disability is NOT listed in the example list as taxable income. Do I put the amount he received from disability in that box or no? What I found in a google search is that Oregon does not tax social security disability, so I think no, but the box doesn't clearly list what counts as social security income in the help buttons/list. Please help!

[DMarkM1]

It depends.  If you allocating due to part-year or non-resident status in OR then allocate the amount of the Federal box that was paid while in OR to OR.  

If you are in the credits section, then also "Yes", include the amount of social security in the box when asked.  According to OR Publication 17, pages 130-131, Appendix, Social Security Disability (taxable and nontaxable) are included in household income for OR credits. 

[rememberkani]

Do I then include the amount only for the months that we were residents in Oregon? We moved to another state halfway through the year.

[DMarkM1]

Yes, only include in the OR box the amount of taxable social security that was received while in OR.  

[rememberkani]

Thank you, final question. Does he then qualify on the next page for the Exemption Credit for Severely Disabled Taxpayers? He has not lost the use of his hands or fet, he is not blind. He does have a permanent condition that makes him unable to work, however even with special equipment, he is unable to work. TurboTax phrases it that he should be "unable to work without special equipment/help" to qualify for that exemption. His difference is that even with equipment, he is unable to work. 

And does he need a doctor's note for that as indicated by TurboTax, or would his social security disability letter suffice?

[JohnW152]

Based on what you're describing, he would appear to qualify for the exemption.

According to Severely disabled in the Form OR-40-N and Form OR-40-P Instructions:

You’re considered to have a severe disability if any of the following apply:

• You permanently lost the use of one or both feet.

• You permanently lost the use of both hands.

• You’re permanently blind.

• You have a permanent condition that, without special equipment or outside help, limits your ability to earn a living, maintain a household, or transport yourself.

• You’re unable to earn a living due to a permanent condition or an impairment of indefinite duration

There is a requirement for a doctor's note -- his social security disability letter apparently isn't sufficient.  However, you don't need to submit it with your return, just keep with for your records.  Per the section cited above:

If you have a severe disability, your physician must write a letter describing it. Keep the letter with your records in case we request a copy.