What Can I Subtract From My Oregon State Return?

Oregon allows certain income, expenses, and adjustments to be subtracted from income when calculating Oregon taxable income. Some subtractions are transferred automatically from your federal return, while others must be entered manually.

Program Entry

Oregon Return → Subtractions from Income

Automatically Transferred Subtractions

The following items are generally transferred automatically to the Oregon return when applicable:

Federally Taxed Social Security Benefits

Social Security benefits included in federal taxable income are automatically transferred to the Oregon return.

U.S. Savings Bonds and Treasury Obligations

Interest reported on Form 1099-INT as interest from U.S. Savings Bonds and Treasury obligations is automatically transferred to the Oregon return.

Railroad Retirement Board Benefits

Railroad Retirement Board retirement benefits reported on Form RRB-1099-R are automatically transferred to the Oregon return.

The Following Information Can Be Added

Taxable Oregon State Refund Reported on Federal Return

If an Oregon state income tax refund was included in federal taxable income, it may be subtracted from Oregon income.

U.S. Bonds and Notes Adjustment

Enter any additional amount of U.S. government interest that should be added to the amount automatically transferred from the federal return.

The amount entered will be included on Schedule OR-ASC or Schedule OR-ASC-NP.

Supplemental Railroad Retirement Benefits

Railroad Retirement Board benefits reported on Form RRB-1099-R are transferred automatically. If you received supplemental Railroad Retirement benefits, such as sickness or unemployment benefits, enter that amount here.

Additional Oregon Subtractions

Tribal Exempt Income Subtraction (Schedule OR-EIS)

Members of federally recognized tribes may qualify to subtract certain income that is exempt from Oregon taxation. This subtraction is claimed on Schedule OR-EIS and is used to report qualifying tribal income that Oregon law excludes from taxable income.

Select this option to complete Schedule OR-EIS and calculate the allowable subtraction.

Special Oregon Medical Subtraction

Certain taxpayers may qualify for the Special Oregon Medical Subtraction if they meet Oregon's eligibility requirements. This subtraction allows eligible taxpayers to reduce Oregon taxable income by qualifying unreimbursed medical and dental expenses.

Select this option to complete the Special Oregon Medical Subtraction worksheet and determine the allowable subtraction.

Federal Pension Income Subtraction

Oregon allows a subtraction for certain retirement benefits received from qualifying federal government retirement plans. Eligibility and the allowable subtraction amount depend on the taxpayer's circumstances and the type of federal retirement income received.

Select this option to complete the Federal Pension Income Subtraction worksheet and calculate the allowable subtraction.

Other Subtractions

Use the Other Subtractions section to report additional Oregon subtractions. Select the appropriate subtraction description and enter the qualifying amount.

301 - Artists Charitable Contribution

Qualifying charitable contributions of literary, musical, artistic, or scholarly works.

303 - Construction Workers and Loggers Commuting Costs

Eligible commuting expenses for qualifying construction workers and loggers.

306 - Federal Gain Previously Taxed by Oregon

Income taxed previously by Oregon but recognized federally in a different tax year.

309 - Federal Income Tax Paid for a Prior Year

Qualifying federal income taxes paid for a prior year.

310 - Fiduciary Adjustments from Oregon Estates and Trusts

Adjustments reported by an Oregon estate or trust.

311 - Foreign Income Tax

Qualifying foreign income taxes eligible for an Oregon subtraction.

312 - Wildfire Civil Action Settlement or Judgment

Qualifying wildfire settlement or judgment proceeds.

313 - Wildfire Civil Action Legal Fees

Eligible legal expenses related to qualifying wildfire litigation.

314 - Individual Development Account Contributions

Qualified contributions made to an Individual Development Account (IDA).

317 - Interest from Local Government Bond

Qualifying interest income from certain local government bonds.

319 - Military Pay

Qualifying military compensation eligible for an Oregon subtraction.

320 - Mortgage Interest Credit

Mortgage interest amounts requiring an Oregon adjustment.

321 - Net Operating Loss for Oregon

Oregon net operating loss adjustment.

322 - Oregon Lottery Winnings

Qualifying Oregon Lottery winnings eligible for subtraction.

323 - Partnership and S Corporation Modifications for Oregon

Oregon adjustments reported by partnerships and S corporations.

327 - Previously Taxed Employee Retirement Plans

Retirement income previously taxed by Oregon.

329 - Public Safety Memorial Fund Award

Qualifying awards received from the Public Safety Memorial Fund.

331 - U.S. Government Interest in IRA or Keogh Distributions

U.S. government interest included within IRA or Keogh plan distributions.

333 - Scholarship Awards Used for Housing Expenses

Qualifying scholarship amounts used for housing expenses.

335 - Legislative Assembly Expenses

Eligible expenses incurred as a member of the Oregon Legislative Assembly.

336 - Film Production Labor Rebate - Greenlight Oregon Labor Rebate Fund

Qualifying Oregon film production labor rebate payments.

338 - Manufactured Dwelling Park Capital Gain Exclusion

Qualifying capital gains from the sale of a manufactured dwelling park that qualify for Oregon's exclusion provisions.

339 - Capital Construction Fund (CCF) Contributions

Qualifying contributions made to a Capital Construction Fund.

340 - Federal Tax Credits

Certain federal tax credits that require an Oregon subtraction adjustment.

342 - Oregon Investment Advantage

Qualifying income eligible for the Oregon Investment Advantage program.

344 - Manufactured Dwelling Park Closure Payments

Eligible payments received as a result of a manufactured dwelling park closure.

347 - Taxable Benefits for Former RDPs

Qualifying taxable benefits received by former Registered Domestic Partners (RDPs).

348 - Previously Taxed IRA Conversions

IRA conversion amounts that were previously taxed by Oregon.

352 - DISC Dividend Payments

Qualifying Domestic International Sales Corporation (DISC) dividend payments.

354 - Depreciation Difference for Oregon

Adjustment required when Oregon depreciation calculations differ from federal depreciation calculations.

355 - Gain or Loss on the Sale of Depreciable Property

An Oregon adjustment related to the gain or loss recognized on the sale of depreciable property.

356 - Passive Activity Losses

Qualifying passive activity loss adjustments allowed by Oregon.

357 - Suspended Losses

Qualifying suspended loss adjustments recognized for Oregon purposes.

358 - Basis of Business Assets Transferred into Oregon

Adjustments related to the basis of business assets transferred into Oregon.

359 - Marijuana Business Expenses

Qualifying marijuana business expenses allowed as an Oregon subtraction.

361 - First-Time Home Buyer Savings Account Contributions and Earnings

Eligible contributions and earnings from a First-Time Home Buyer Savings Account.

362 - AmeriCorps or National Service Education Award

Qualifying AmeriCorps or National Service educational awards.

384 - CPAR Subtraction

A subtraction related to adjustments made under the Centralized Partnership Audit Regime (CPAR).

385 - Psilocybin Business Expenses

Qualifying psilocybin business expenses allowed as a subtraction for Oregon purposes.

387 - PTE-E Tax Refund Included on Entity-Level Federal Return

An adjustment for pass-through entity elective tax (PTE-E) refunds that were included in income on the federal return.

388 - Casualty Loss from State-Declared Emergency

Qualifying casualty losses resulting from a state-declared emergency.

389 - Federal Law Disconnect

An adjustment required when Oregon law differs from federal tax law and Oregon does not conform to a federal provision.

How Does This Affect My Return?

Subtractions reduce Oregon income. As a result:

Oregon taxable income may decrease.
Oregon tax liability may decrease.
Certain income-based deductions and credits may be affected.

Notes

Only enter subtractions that apply to your situation.
Most taxpayers will qualify for only a few Oregon subtractions.
Keep documentation supporting any subtraction claimed.
Some subtractions may be reported on a Schedule K-1, trust statement, or other Oregon tax document.
Amounts automatically transferred from the federal return generally do not need to be entered again.

There are additional 'Subtractions from Income' that may apply and are not explained fully in this article. For full explanations of these items, please see Subtractions by clicking here.