2019 Publication OR-17

2019

OREGON

150-101-431 (Rev. 04-01-22)

Publication OR-17

Individual Income Tax Guide

Important updates

April 1, 2022

This publication was updated on April 1, 2022 to correct a line reference on page 102 (retirement income credit

worksheet).

April 20, 2020

Due date extension. Director¡¯s Order 20-02 provides additional relief and extended the Oregon tax filing and

payment deadline to July 15, 2020 for Oregon returns with a filing due date on or after April 1, 2020, and before

July 15, 2020 for Personal Income, Transit Self-Employment, Estate, Partnership, S-Corporations, and Corporate

Excise/Income Taxpayers and Filers. This also extended the deadline for filing a claim for a refund to July 15,

2020, if the deadline for filing the claim for the refund would have expired on or after April 1, 2020 and before

July 15, 2020.

Appeal extension: Director¡¯s Order 20-02 also temporarily extended the time to submit a written objection or

conference request. The deadline to submit a written objection or request for a conference with the department

after receiving a Notice of Deficiency, Notice of Proposed Refund Adjustment or Denial, or Notice of Liability is extended to 90 days after the date on the Notice of Deficiency, Notice of Proposed Refund Adjustment,

or Notice of Liability. This applies to deadlines for filing a written objection or request for a conference that

expires on or after April 1, 2020 and before July 16, 2020. See ¡°Appeals¡± for more information.

March 27, 2020

Due date extension. Director¡¯s Order 20-01, extended the Oregon tax filing and payment deadline from April

15, 2020 to July 15, 2020. As a result, interest and penalties with respect to the Oregon tax filings and payments

extended by this Order will begin to accrue on July 16, 2020. See ¡°Interest and Penalties¡± for more information.

January 6, 2020

In December 2019, Congress passed Public Law 116-94, which extended certain tax deductions, credits, and

other items that had previously expired. We¡¯ve updated this publication to include information about the federal deduction for qualified tuition and fees, which has been extended for tax years 2018 through 2020, and

the related Oregon subtraction. We¡¯ve also updated our examples for the special Oregon medical subtraction

to reflect the decrease in the medical expense itemized deduction ¡°floor¡± from 10 percent of adjusted gross

income (AGI) to 7.5 percent of AGI. This decrease has been extended for tax years 2019 and 2020. See ¡°Adjustments¡± and ¡°Subtractions¡± for more information.

This publication supplements the Oregon income tax instruction booklet and the

Internal Revenue Service (IRS) Tax Guide: Publication 17, Your Federal Income Tax For Individuals.

This is a guide, not a complete statement of Oregon laws and rules. Law or rules may have

changed after printing. Refer to the Oregon Revised Statutes (ORS) and Oregon Administrative Rules (OAR), available at dor.

Forms and publications

For tax forms and publications go to dor/forms or write:

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PO Box 14999

Salem OR 97309-0990

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Questions. If you're a tax professional, you can email us for assistance. Research your question. We can assist you

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Contents

December 26, 2019................................................................2

Federal tax law.....................................................................7

New information..................................................................7

Important reminders...........................................................7

Wages, salaries, and other pay for work.........................47

Waterway workers.............................................................47

Adjustments..................................................................48

Residency............................................................................13

Extensions of time to file..................................................15

Which form do I file?.........................................................15

Filing status........................................................................16

Registered domestic partners (RDPs).............................18

Individual Taxpayer Identification Number..................19

Military personnel filing information............................20

Alimony paid......................................................................48

Certain business expenses of reservists, performing

artists, and fee-basis government officials................48

Educator expenses.............................................................49

Health savings account (HSA) deduction......................49

IRA or self-employed SEP and savings incentive

match plan for employees (SIMPLE)

contributions..................................................................49

Moving expenses...............................................................50

Penalty on early withdrawal of savings.........................50

Self-employed health insurance .....................................50

Self-employment tax .........................................................50

Student loan interest .........................................................50

Tuition and fees..................................................................51

Write-in adjustments on federal Form 1040,

Schedule 1, line 22 ........................................................51

Payments and refunds............................................25

Additions.........................................................................52

Payment options.................................................................25

Direct deposit of refund....................................................25

Application of refund........................................................26

Refund processing.............................................................27

Injured spouse refund claims..........................................27

Oregon statute of limitations on refunds.......................27

Accumulation distribution from certain domestic

trusts...............................................................................52

Achieving a Better Life Experience (ABLE) Account

nonqualified withdrawal.............................................52

Capital loss carryover difference.....................................52

Claim of right income repayments..................................52

Depletion in excess of property basis.............................53

Disposition of inherited

Oregon farmland or forestland..................................53

Federal business income deduction................................54

Federal election on interest and dividends of a

minor child....................................................................54

Federal income tax refunds..............................................54

Federal subsidies for employer prescription drug plans....55

Income taxes paid to another state by a

pass-through entity......................................................56

Individual development account (IDA)..........................56

Interest and dividends on government bonds of

other states.....................................................................56

Lump-sum distributions...................................................57

Nonresident capital losses and loss carryforwards......57

Oregon College and MFS 529 Savings Plan

nonqualified withdrawal.............................................58

Unused business credits...................................................58

General information...................................................9

Do I have to file an Oregon income tax return?..............9

Electronic filing for Oregon.............................................11

2-D barcode filing for Oregon..........................................11

Why Oregon needs a federal return...............................11

Record-keeping requirements..........................................11

Filing an Oregon return..........................................13

Amended returns ......................................................29

How do I amend my Oregon return?.............................29

Interest and penalties.............................................31

Interest.................................................................................31

Penalties...............................................................................32

Audits and appeals....................................................35

What to do if your return is audited...............................35

Appeals................................................................................36

Failure to file an Oregon income tax return....39

Filing a return after tax is assessed.................................39

Income .............................................................................41

What income is taxable to Oregon?.................................41

Air carrier employees........................................................41

Alimony received...............................................................42

Business income or loss.....................................................42

Federal Schedule E and F income....................................42

Gain, loss, and distributions............................................42

Global intangible low-taxed income (GILTI).................42

Hydroelectric dam workers..............................................42

Individual Retirement Account (IRA) distributions....43

Interest and dividend income..........................................43

Interstate transportation wages (Amtrak Act ).............43

Like-kind exchange or involuntary conversion............45

Retirement income.............................................................46

Social Security and Railroad

Retirement Board benefits...........................................46

State and local income tax refunds.................................46

Unemployment insurance benefits

and other taxable income.............................................47

150-101-431 (Rev. 04-01-22)

Subtractions..................................................................59

ABLE Account deposit......................................................59

American Indian................................................................59

Artist¡¯s charitable contribution........................................60

Capital Construction Fund...............................................61

Construction worker and logger commuting expenses....61

Conversions and exchanged property............................62

Domestic international sales corporation (DISC)

dividend payments.......................................................62

Federal income tax liability..............................................62

Federal tax worksheet.......................................................62

Federal pension income?....................................................64

Federal Tax Credits...............................................................65

First-time home buyer savings account (FTHBSA)

contributions and earnings.........................................66

4

Foreign income tax............................................................67

Income on a composite return.........................................67

Individual development account (IDA)..........................67

Interest and dividends on U.S. bonds and notes............67

Land donations to educational institutions carryforward....68

Legislative Assembly salary and expenses....................69

Local government bond interest......................................69

Lottery winnings...............................................................69

Manufactured dwelling park capital gain exclusion....69

Manufactured dwelling park payments........................70

Marijuana business expenses..........................................70

Mortgage interest credit....................................................70

Oregon College and MFS 529 Savings Plan deposits.....71

Oregon income tax refund...............................................71

Oregon Investment Advantage........................................71

Previously taxed employee retirement plans................72

Previously taxed IRA conversions..................................73

Public Safety Memorial Fund Awards...........................73

Railroad Retirement Board benefits................................73

Scholarship awards used for housing expenses...........73

Social Security benefits.....................................................73

Special Oregon medical....................................................73

Taxable benefits for former RDPs....................................76

Tuition and fees..................................................................77

U.S. government interest in IRA or Keogh distributions....77

Rural emergency medical service providers...............103

Rural health practitioners...............................................103

Carryforward credits..............................................104

Agriculture workforce housing.....................................104

Alternative qualified research activities carryforward....105

Biomass production/collection carryforward.............105

Bovine manure production/collection.........................105

Business energy carryforward.......................................106

Child and dependent care carryforward.....................106

Child Care Fund contributions......................................106

College Opportunity Grant (auction)............................106

Crop donation...................................................................107

Electronic commerce zone investment carryforward....107

Employer-provided dependent care assistance

carryforward...............................................................107

Employer scholarship......................................................108

Energy conservation projects.........................................108

Fish screening devices.....................................................108

Lender¡¯s credit: affordable housing...............................108

Lender¡¯s credit: energy conservation carryforward.....109

Long-term enterprise zone facilities carryforward....109

Oregon IDA Initiative Fund donation..........................109

Oregon Low-Income Community Jobs

Initiative/New Markets.............................................109

Oregon Production Investment Fund (auction).......... 110

Pollution control facilities carryforward...................... 110

Qualified research activities carryforward................. 110

Renewable energy development contribution

(auction) carryforward............................................... 110

Renewable energy resource equipment

manufacturing facility carryforward...................... 111

Residential energy........................................................... 111

Rural technology workforce development................... 111

Transportation projects................................................... 111

University Venture Development Fund

contributions................................................................ 112

Other items....................................................................79

Net operating losses (NOLs) for Oregon........................79

Depreciation and amortization........................................82

Partnership and S corporation modifications for

Oregon and Business tax credits from PTE..............82

Qualified business income reduced tax rate.................83

Basis of business assets transferred into Oregon..........84

Sale of assets.......................................................................85

Gain on the sale of an Oregon residence........................85

Fiduciary adjustment.........................................................85

Market-based sourcing.....................................................86

Passive activity losses (PALs)...........................................86

Oregon percentage.............................................................87

Deductions and modifications.........................................87

Itemized deduction add backs.........................................87

Interest on certain installment sales...............................90

Farm liquidation long-term capital gain tax rate..........90

Farm income averaging ....................................................91

Federal law disconnect......................................................91

Refundable credits.................................................. 113

Claim of right income repayment................................. 113

Earned income credit (EIC)............................................ 113

Manufactured home park closure................................. 113

Working family household and dependent care

(WFHDC)..................................................................... 113

Oregon surplus credit..................................................... 114

Credits .............................................................................92

Interest on underpayment of estimated tax.... 115

Types of credits...................................................................92

Do I owe underpayment interest?................................. 115

Figure your required annual payment......................... 115

Exceptions to paying interest on an underpayment

of estimated tax........................................................... 115

Standard credits.........................................................93

Exemption credit................................................................93

Income taxes paid to another state..................................95

Mutually-taxed gain on the sale of residential property....99

Oregon Cultural Trust contributions............................100

Oregon Veterans¡¯ Home physicians..............................100

Political contributions.....................................................100

Reservation enterprise zone........................................... 101

Retirement income........................................................... 101

150-101-431 (Rev. 04-01-22)

Estimated tax.............................................................. 117

Should I make estimated tax payments?...................... 117

Exceptions......................................................................... 117

Special situations............................................................. 117

Appendix....................................................................... 118

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