2021 Publication OR-17 - Oregon

1 2021 Publication OR-17 . Oregon Individual Income Tax Guide 150-101-431 (Rev. 11-30-21). Important updates 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 Administra- tive Rules (OAR), available at Forms and publications For tax forms and publications go to or write: Forms Oregon Department of Revenue PO Box 14999. Salem OR 97309-0990. Do you have questions or need help? 503-378-4988 or 800-356-4222. Contact us for ADA accommodations or assistance in other languages. Tax professionals Questions. If you're a tax professional, you can email us for assistance. Research your question. We can assist you with Oregon income tax law and policy questions, but we can't provide or discuss specific taxpayer information, prepare returns, or make calculations for you.

2 You can include .txt files in your email, but we are unable to open any other type of attachments. In the email, include your question with your name, business name, and phone (with area code). We'll get back to you within three business days. Personal and partnership income tax: Corporate income or excise tax: Corporate minimum tax: Corporate nexus and voluntary disclosure: Corporate activity tax: Payroll and business tax: Fiduciary/estate/inheritance tax: Transit self-employment taxes: Revenews. To receive emailed information from us, subscribe to Revenews, at and navigate to Revenews. Contents Federal tax Interest and dividend New Interstate transportation wages (Amtrak Act )..49. Important Like-kind exchange or involuntary Retirement General Social Security and Railroad Retirement Board benefits ..52. Do I have to file an Oregon income tax return?..9 State and local income tax Electronic filing for Unemployment insurance (UI) benefits and other 2-D barcode filing for taxable Why Oregon needs a federal Wages, salaries, and other pay for Record-keeping Waterway Filing an Oregon Alimony Extensions of time to Certain business expenses of reservists, performing Which form do I file?

3 15 artists, and fee-basis government Filing Educator Registered domestic partners (RDPs)..19 Health savings account (HSA) Individual Taxpayer Identification IRA or self-employed SEP and SIMPLE Military personnel filing Moving Penalty on early withdrawal of Oregon Self-employed health insurance ..56. Personal income tax Self-employment tax ..57. Qualified business income reduced tax Student loan interest ..57. Farm liquidation long-term capital gain tax Other adjustments on federal Form 1040, Schedule 1, Farm income lines 23 and 25 ..57. Interest on certain installment ABLE account or Oregon 529 College Savings Network account tax credit Accumulation distribution from certain domestic Other individual ABLE account nonqualified Payments and Capital loss carryover Payment Child Care Fund direct deposit of Claim of right income Application of College Opportunity Grant Fund Refund Depletion in excess of property Injured spouse refund Disposition of inherited Oregon farmland Oregon statute of limitations on refunds.

4 33 or Disqualified charitable Amended returns ..35 Federal business income How do I amend my Oregon return?..35 Federal election on interest and dividends of a minor Interest and Federal estate Federal income tax Federal subsidies for employer prescription drug plans ..63. Audits and First-time home buyer savings account What to do if your return is nonqualified Gambling losses claimed as an itemized Income taxes paid to another state by a Failure to file an Oregon income tax pass-through Filing a return after tax is Individual development account (IDA)..65. Interest and dividends on government bonds Income ..47 of other What income is taxable to Oregon ?..47 Lump-sum Air carrier Nonresident capital losses and loss Alimony Oregon College and MFS 529 Savings Plan Business income or nonqualified Federal Schedule E and F Oregon Production Investment Fund Gain, loss, and Refund of Oregon -only itemized deductions from Global intangible low-taxed income (GILTI)..48 a prior Hydroelectric dam University Venture Development Fund Individual Retirement Account (IRA) Unused business 150-101-431 (Rev.)

5 11-30-21) 4. WFHDC medical Credits ..98. Types of ABLE account deposit Standard American Exemption AmeriCorps educational Income taxes paid to another 101. Artist's charitable Exception for Oregon resident partners and S. Capital Construction Fund (CCF) corporation Charitable contribution non-itemized Mutually-taxed gain on the sale of residential Construction worker and logger commuting Conversions and exchanged Oregon Cultural Trust Domestic international sales corporation (DISC). Oregon Veterans' Home dividend Political Federal income tax Reservation enterprise Federal tax Retirement Federal pension income .. 74. Rural emergency medical service Federal tax Rural health First-time home buyer savings account (FTHBSA). contributions and Carryforward 110. Foreign income Agriculture workforce 110. Income on a composite Alternative qualified research activities 111. IDA Biomass production/collection 112. Interest and dividends on bonds and Bovine manure 112. Land donation to educational institutions Child Care Fund 112.

6 College Opportunity Grant Fund contributions Legislative Assembly salary and (auction).. 112. Local government bond Crop 113. Lottery Electronic commerce zone investment 113. Manufactured dwelling park capital gain Employer 113. Manufactured dwelling park closure Energy conservation project .. 114. Marijuana business Fish screening 114. Mortgage interest Lender's credit: affordable 114. Oregon College and MFS 529 Savings Plan deposits Lender's credit: energy conservation 115. Long-term enterprise zone facilities 115. Oregon income tax Oregon IDA Initiative Fund 115. Oregon Investment Oregon Low-Income Community Jobs Previously taxed employee retirement Initiative/New 115. Previously taxed IRA Oregon Production Investment Fund Public Safety Memorial Fund contributions (auction).. 116. Railroad Retirement Board Pollution control facilities 116. Scholarship awards used for housing Qualified research activities 116. Social Security Renewable energy resource equipment Special Oregon manufacturing facility 116.

7 Taxable benefits for former Residential energy 117. Tuition and Rural technology workforce 117. government interest in IRAor Keogh Short line railroad 117. Transportation 118. Other University Venture Development Fund 118. Net operating losses (NOLs) for Refundable 119. Depreciation and ABLE account 119. Partnership and S corporation modifications for Claim of right income 119. Oregon and Business tax credits from Earned income credit (EIC)..120. CPAR Manufactured dwelling park Basis of business assets transferred into Oregon 529 College Savings Network account Sale of contributions ..120. Gain on the sale of an Oregon Working family household and dependent care Fiduciary adjustment from Oregon estates and (WFHDC)..121. Market-based Oregon surplus Passive activity losses (PALs)..94. Oregon Interest on underpayment of estimated Deductions and Do I owe underpayment interest?..123. Federal law Figure your required annual Exceptions to paying interest on an underpayment of estimated 150-101-431 (Rev.)

8 11-30-21) 5. Estimated Should I pay estimated tax?..125. Special Federal tax liability subtraction. The federal tax Federal tax law subtraction limit is $7,050 ($3,525 if married filing No extension to pay. Oregon doesn't allow an extension separately) for 2021. It may be limited further based of time to pay your tax, even if the IRS is allowing an on your adjusted gross income (AGI). See Federal extension. Your 2021 Oregon tax is due April 18, 2022. income tax liability in Subtractions.. Federal law connection. Oregon has a rolling tie to Subtraction for AmeriCorps educational awards. A. changes made to the definition of federal taxable new subtraction is available for AmeriCorps volun- income, with the exceptions noted below. For all teers who receive educational awards after complet- other purposes, Oregon is tied to federal income tax ing a term of national service. See AmeriCorps edu- laws as amended and in effect on April 1, 2021. cational award in Subtractions.

9 Oregon exceptions to federal tax law: Changes to qualified withdrawals from Oregon 529. Internal Revenue Code (IRC) Section 139A tax exemp- College Savings Network accounts. Qualified with- tion for federal subsidies for employer prescription drawals now include expenses related to apprentice- drug plans. If you have this type of business income, ship programs and certain student loan payments. you'll have an addition on your Oregon return. See Oregon 529 College Savings Network account IRC Section 529 tax exemption for earnings on col- contributions in Refundable credits.. lege savings plan funds used for K-12 tuition. Ore- Credit recaptures for Oregon 529 College Savings gon College & MFS 529 Savings Plans may be used Network and ABLE account contributions. If you for higher education expenses only. claimed a tax credit based on your contributions to IRC Section 199A deduction for noncorporate quali- an Oregon College or MFS 529 Savings Plan account fied business income (QBID).

10 Oregon is discon- or an ABLE account and later made a nonqualifed nected from the QBID. This deduction doesn't flow withdrawal of those contributions, your credit(s) may through to the Oregon personal income tax return, have to be recaptured. See Additions to tax in Ore- so there is no addition to report; however, the deduc- tion must be added back on fiduciary returns. gon tax.. Data security breaches. Tax professionals suffering References to federal return forms. In this publica- a data security breach associated with tax return tion, references to the federal return or to Form 1040 preparation must report the breach promptly to the also include a reference to Forms 1040-SR, 1040-NR, department. See our website for additional details. and 1040-X, unless otherwise indicated. Important reminders New information Revenue Online. Revenue Online provides conve- Kicker refund. Oregon 's surplus credit, known as the nient, secure access to tools for managing your Ore- kicker, will be claimed as a credit on your 2021 tax gon tax account.