Fillable Form Oc-V - Oregon Composite Return Payment Voucher (Page 2 of 11) in pdf

Oregon-source distributive income

Self-employment tax deduction

Each PTE must calculate the self-employment tax deduction

Distributive income includes items directly related to the

for each electing member that is subject to self-employment

PTE that are considered in determining the federal taxable

tax. The self-employment tax deduction that is attributable

income of the nonresident owner. It also includes modifica-

to the Oregon-source distributive income is subtracted from

tions provided in ORS Chapter 316 and other Oregon laws

the Oregon-source distributive income and the net result is

that directly relate to the PTE.

entered on Schedule OC1, column (d).

Examples of the modifications allowed that relate to the

Credits

PTE’s income include adjustments for depreciation, deple-

tion, gain or loss difference on the sale of depreciable prop-

Credits normally allowed on owners’ tax returns, such as the

credit for taxes paid to another state or exemption credit, are

erty, U.S. government interest, and any modification for

not allowed on the composite return. For corporate excise or

federal targeted jobs tax credit. Modifications do not include

income taxpayers, the only credit allowed on the composite

the federal tax subtraction, itemized deductions, and the

return is the Oregon surplus credit.

Oregon standard deduction allowed to individual taxpayers.

See line instructions for Schedule OC2.

Oregon-source distributive income is the portion of the

entity’s modified distributive income that is derived from or

Estimated tax payment instructions

connected with Oregon sources. Oregon-source distributive

income does not include return of capital, income sourced in

another state, or other distributions not taxable by Oregon.

The PTE is required to make estimated tax payments in the

PTE’s name on behalf of all owners who elect to join in the

If the PTE has business activity only in Oregon, multiply the

composite filing.

distributive income of the PTE by the ownership percentage

of the nonresident owner.

Payment voucher: Follow the instructions below and use the

Form OC-V on page 6 for payments. Calculate the amount of

Apportionable income

tax required to be paid as follows:

PTEs with business activity both inside and outside Oregon

For individual electing owners: Multiply the electing

during the year must calculate Oregon-source distributive

owner’s share of Oregon-source distributive income by the

income for nonresident owners. Fill out Schedule AP-1 (avail-

tax rate for the electing owner’s filing status. See the 2013

able on our website) to figure the apportionment percentage.

estimated tax rate charts in the Form 40-ESV Instructions

Fill out Schedule AP-2 using the PTE’s modified distributive

for Estimated Income Tax.

income to apportion the income between Oregon and other

For C corporation electing owners: Multiply the electing

states.

owner’s share of Oregon-source distributive income by the

Multiply line 11 on the Schedule AP-2 by the ownership

corporate tax rates, or use the corporate minimum tax rates.

percentage of each nonresident owner to get their share of

See the corporate estimated tax instructions.

Oregon-source distributive income.

For estate and trust electing owners: Estimated tax pay-

ments are not required. If you choose to make payments,

Guaranteed payments

multiply the electing owner’s share of Oregon-source dis-

Guaranteed payments are treated as a business income

tributive income by the tax rate for single or married/RDP

component of the PTE’s distributive income and attributed

filing separately. See the 2013 estimated tax rate charts in the

directly to the owner receiving the payment. See Oregon

Form 40-ESV instructions for estimated income tax.

Administrative Rule (OAR) 150-316.124(2).

Payment transfers: If the PTE needs to transfer a payment

Distributions

from one of it’s accounts to another or an owner’s account,

see the instructions on page 5 and use the Payment Transfer

Distributions to shareholders of an S corporation are gener-

Request form, Form OC-TR, on page 11.

ally not taxable income. There are exceptions. For instance,

Tiered entities

if the corporation was formerly taxed as a C corporation, any

C corporation earnings and profits that are distributed are

A pass-through entity that owns an interest in another pass-

taxable. Attribute any taxable part of a distribution directly

through entity (upper-tier entity) is not allowed to join in

to the shareholder receiving the distribution. Multiply the

the composite filing. Thus, do not send tax payments for an

taxable part by the Oregon apportionment percentage from

owner who is another PTE. If the owner is another PTE, they

Schedule AP to determine how much to include in the share-

must file their own return and make their own payments.

holder’s income.

Example: The owners of Partnership A are: Partnership

Deductions

B, one LLC, one S corporation, three individuals, and two

C corporations. Only the three individuals and two C cor-

Individual tax deduction

porations can join the composite return. Partnership A does

Deductions normally allowed to individuals (such as item-

not make estimated tax payments on behalf of the upper-

ized deductions or the standard deduction) are not allowed

tiered entities (Partnership B, the LLC, or the S corpora-

on composite returns.

tion). Each of these upper-tiered PTEs will file their own

150-101-154 (Rev. 12-12)

Form Oc-V - Oregon Composite Return Payment Voucher Page 2

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