Retirement Income Credit
If you were age 62 or older on December 31, 2015, and receiving retirement income, you may qualify for a retirement income credit. Retirement income includes payments in Oregon taxable income from:
- State or local government public pensions.
- Employee pensions.
- Individual retirement plans.
- Employee annuity plans.
- Deferred compensation plans including defined benefits, profit sharing, and 401(k)s.
- Federal pensions (includes military) not subtracted from Oregon taxable income.
How do you qualify for the credit?
- Your household income is less than $22,500 ($45,000 if married filing jointly), and
- Your Social Security benefits and/or Tier 1 Railroad Retirement Board benefits are less than $7,500 ($15,000 if married filing jointly), and
- Your household income plus your Social Security and/or Tier 1 Railroad Retirement Board benefits is less than $22,500 ($45,000 if married filing jointly).
You can claim this credit of the credit for the elderly or the disabled, but not both.
Household income includes income (both taxable and nontaxable) each spouse received during the year. Household income includes gross income reduced by adjustments as reported in your federal adjusted gross income (AGI).
You also need to include items not in your federal AGI. These items include but are not limited to:
- Veteran’s and military benefits.
- Gifts and grants (total amount minus $500).
- Disability pay.
- Nontaxable dividends (other than “return of capital”).
- Insurance proceeds.
- Nontaxable interest.
- Lottery winnings.
- Railroad Retirement Board benefits (Tier 2 only).
- IRA conversions included in AGI.
Do not include:
- Social Security and Tier 1 Railroad Retirement Board benefits.
- Your state tax refund.
- Pension income excluded from federal AGI that is a return of your contributions.
- Pensions that are rolled over into an IRA that are not included in AGI.Any losses claimed are limited to $1,000 for each activity. Depreciation is limited to $5,000. The credit cannot be more than your tax liability. You cannot carry any amount that is more than your tax liability over to next year. You may claim this credit or the credit for the elderly or the disabled, but not both.
Political Contribution Credit
Fill in your total political contributions, up to $100 on a joint return or up to $50 on all others. Your contribution(s) of money must have been made during 2015 to any of the following:
- A political party.
- A qualified candidate (or the candidate’s principal campaign committee) for federal, state, or local office to be voted for in Oregon.
- A political action committee certified in Oregon.
Credit for Taxes Paid to Another State
If you were a full-year Oregon resident and had income taxed by Arizona, California, Indiana, or Virginia, you generally cannot claim the credit on your Oregon return. However, you can claim the credit on the nonresident return you file with those states. If income is taxed by Oregon and another state not listed here, claim the credit on your Form 40 Oregon Resident return.
This credit is only for state income tax. You cannot claim this credit for city or county income tax, sales, tax, alternative minimum tax (AMT), property tax, school tax, or building funds.
Your credit is the smallest of the following:
- The other state's 2015 net tax liability.
- Your Oregon tax liability after all credits, except credits for income taxes paid to other states.
We will automatically calculate this credit for your Resident Oregon return when you add a Nonresident other state return to your account. If you have a Part-Year Oregon return, you will need to manually enter the information asked within the Oregon state program.
Oregon offers several other credits that are available within the Credits section of the Oregon state program. Please refer to the instructions for Oregon Form 40 to see a complete list of available credits with instructions.
Oregon surplus credit (kicker). The Oregon surplus credit is a refundable credit claimed on your 2015 Oregon tax return. The credit is 5.6 percent of your 2014 Oregon tax liability (2014 Form 40, line 31) as adjusted or amended, reduced by any credit claimed for income taxes paid to another state (2014 Form 40, line 38). The surplus credit percentage has been determined by the Oregon Department of Administrative Services in accordance with Oregon Revised Statute 291.349. In order to claim the Oregon surplus credit, you must file a 2015 return, even if you’re not otherwise required to do so. You must have filed your 2014 Oregon return before you can claim a surplus credit on your 2015 Oregon return. Use the worksheet on page 22 to determine the amount of your surplus credit.