Retirement Income Credit - (code 811)
If you were age 62 or older on December 31, 2016, and receiving retirement income, you may qualify for this 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.
What's included in household income?
Household income generally 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/or 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 that are not included in AGI.
To determine household income, you must separate income (or loss) from businesses, farms, rentals or royalties, and dispositions of tangible or intangible property. Combine all income from similar sources for net income or loss. Any net loss from the source is limited to $1,000. Net operating loss carrybacks or carryforwards are not allowed. Capital loss carryforwards are not allowed.
If the combined total of your depreciation, depletion, and amortization deductions is more than $5,000, you must add the excess back into household income. You must also increase your household income by the Oregon income tax modification for depletion in excess of basis.
Political Contribution Credit - (code 809)
Oregon law allows a tax credit for political contributions. You may not claim this credit if your federal adjusted gross income exceeds $200,000 on a jointly filed return, or $100,000 on all other returns.
To qualify, you must have contributed money in the tax year you claim the credit. You must reduce the amount of your contribution by the fair market value (FMV) of any items or services you receive in exchange for your contribution. Contributions of goods or services do not qualify. Keep receipts from the candidate or organization with your tax records. You can use copies of cancelled checks as your receipt.
Your credit is equal to your contribution, limited to $100 on a joint return or $50 on a single or separate return. The $3 check-off on the Oregon tax return does not qualify for this credit.
1. A political party.
2. A qualified candidate (or the candidate’s principal campaign committee) for federal, state, or local office to be voted for in Oregon.
3. A political action committee certified in Oregon.
Credit for Taxes Paid to Another State - (code 802)
If you pay tax to Oregon and another state on the same income, you have “mutually-taxed income.”
In certain circumstances, you may be able to claim a credit on your Oregon return for income taxes paid to another state. Only take a credit for tax paid to another state if Oregon taxed the income and the other state also had a right to tax the same income. For instance, if you live in Oregon, other states cannot tax your pension income. Only the state you live in can tax your pension income. If you pay tax to another state on your pension income, you cannot take a credit for that tax.
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 2016 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). Oregon’s surplus credit (known as the “kicker”) will be claimed as a credit on your 2016 tax return. The credit is a percentage of your 2014 tax liability. You may choose to donate your kicker credit to the Oregon State School Fund. See our instruction booklets for more information about the kicker, instructions for calculating your credit, and donating your credit to the Oregon State School Fund.