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NC Tax Reform Does Not Affect Social Security Disability Benefits

Injured workers in NC who survive off of their Social Security Disability benefits narrowly missed a close call with tax reform.

Disability4_06132014Currently Social Security benefits are not taxed in North Carolina. However, earlier this year, a bill was tentatively approved by the Senate that would initiate a 5.4% tax on Social Security benefits in 2014 and 5.25% thereafter on beneficiaries' monthly checks.

However, that segment was taken out in the tax reform bill that swept through the House and Senate in mid-July and was recently signed into law by Governor Pat McCrory on July 23rd.

Arguments against Social Security Tax in NC

Those in opposition of initiating a Social Security tax, such as this opinion editorial from the Charlotte Observer, said it would:

1)      Have devastating affects Social Security Beneficiaries with low incomes

Many argued that seniors on a fixed income just don't have a lot to spare. Some noted that the tax might be applied unfairly - since it would only apply to those with an additional source of income. They argued that if the additional source of income was very little, those being taxed might have less total income than those surviving solely off of their Social Security benefits and not being taxed.

2)      Make NC less attractive to retirees.

Publications such as Kiplinger and Forbes often rank North Carolina as one of the best places to retire and one of the reasons often cited is NC's lack of Social Security Tax. Lawmakers want to continue to make NC attractive to retirees that will bring more wealth to the state and boost the economy.

3)      Be a difficult move politically

The Raleigh News & Observer ran an article in June which reported that although seniors only make up 13% of NC's population, they accounted for a quarter of North Carolina voters in the midterm elections. As Michael Blitzer, a political expert at Catawba College said, "that's a dangerous group to energize..."

Social Security Disability Benefits

Although many of the arguments centered on retirement, retirement benefits are just one of the many types of benefits Social Security provides.

According to a recent press release by the Social Security Regional Commissioner in Atlanta, disabled workers and their dependents account for 19% of the total benefits paid, while survivors' benefits account for 11%.

Since disability and survivor SS situations are seen as especially dire, many of these recipients are not even taxed at the federal level - although in situations where they're receiving a significant source of additional income, they may incur taxes.

Do you need Social Security Disability Benefits?

If you're filing for Social Security benefits, you may have a better chance of getting a favorable result when you hire an attorney, according to the National Organization of Social Security Claimants' Representatives (NOSSCR).

At the Law Offices of James Scott Farrin, we have an entire department dedicated to helping disabled workers in North Carolina with their Social Security Disability claims.

If you, or a spouse, cannot work and have been denied Social Security Disability benefits, talk with one of our North Carolina Social Security Disability lawyers today. Call us for a free case evaluation at 1-866-900-7078.

Please note that the attorneys at The Law Offices of James Scott Farrin are not tax attorneys or CPAs and we recommend consulting one of these professions prior to making any decisions or changes to your tax filings.

Contact Information

Raleigh Law Office

5848-100 Faringdon Place
Raleigh, NC 27609
Phone: 919-834-1184
Toll Free: 1-866-900-7078

Durham Law Office

280 South Mangum Street, Suite 400
Durham, NC 27701
Phone: 919-688-4991
Fax: 800-716-7881

Fayetteville Law Office

517 Owen Drive
Fayetteville, NC 28304
Phone: 910-488-0611
Toll Free: 1-866-900-7078

Charlotte Law Office

1001 Morehead Square Drive, Suite 350
Charlotte, NC 28203
Phone: 704-599-1078
Toll Free: 1-866-900-7078

New Bern Law Office

1505 South Glenburnie Rd, Unit P
New Bern, NC 28562
Phone: 252-634-9010
Toll Free: 1-866-780-3422

Greenville Law Office

702 G Cromwell Dr.
Greenville, NC 27858
Phone: 252-355-5205
Toll Free: 1-866-780-3227

Greensboro Law Office

300 N. Greene Street, Suite 850
Greensboro, North Carolina 27401
Phone: 336-665-7072
Toll Free: 1-866-900-7078

Goldsboro Law Office

214 South William Street, Suite 3
Goldsboro, NC 27530
Phone: (919)-731-2581
Toll Free: 1-866-900-7078

Henderson Law Office

514 Dabney Drive, Suite 200
Henderson, NC 27536
Phone: 252-492-4600
Toll Free: 1-866-900-7078

Roanoke Rapids Law Office

709 Julian R. Allsbrook Highway
Roanoke Rapids, NC 27870
Phone: 252-537-9670
Toll Free: 1-866-900-7078

Rocky Mount Law Office

3202 Sunset Avenue, Suite B
Rocky Mount, NC 27804
Phone: 252-937-4730
Toll Free: 1-866-900-7078

Sanford Law Office

703-B South Horner Boulevard
Sanford, NC 27330
Phone: 919-775-1564
Toll Free: 1-866-900-7078

Wilson Law Office

2315 Airport Blvd Suite A
Wilson, North Carolina 27896
Phone: 252-246-9090
Toll Free: 1-866-900-7078

Winston-Salem Law Office

301 N. Main Street, Suite 2409-C
Winston-Salem, NC 27101
Toll Free: 1-866-900-7078