Worksheet Cr - Claim Of Right Income Repayments Page 4
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9Claim of Right deduction
[Addition code 103] [Modification code 649]
If you claimed a federal deduction for the repayment on your federal return, you have a choice of how to claim it on your
Oregon return. The federal deduction can flow through to your Oregon return or you can claim the credit instead. You can
choose which option is more beneficial for your Oregon return. If you let the federal deduction flow through, you don’t need
to do anything further on your Oregon return.
If the credit results in less tax, you can claim the Oregon credit. You must add back any federal deduction to claim the credit
on your Oregon return. To see which option is best, first calculate your credit on the credit worksheet on page 1. Then, if
required, complete the addition worksheet (below). Finally, complete the deduction worksheet for your form type on page 5.
Addition
The addition on your Oregon return is generally equal to the deduction on your federal return. If you claimed the federal
deduction on Schedule A, your addition may be less. Use the addition worksheet below to figure the Oregon addition required
when taking the claim of right deduction on federal Schedule A and the claim of right credit on your Oregon return. Unless
otherwise stated, all references are to the tax year when you repaid the income.
Addition worksheet for deduction on Schedule A
1. Form 40 filers—Enter your net Oregon itemized deductions from line 25.
Form 40N or 40P filers—Enter your Oregon itemized deductions from line
43* ................................................................................................................................. 1.
2. Enter the federal deduction for claim of right included on federal Schedule
A, line 28 ...................................................................................................................... 2.
3. Line 1 minus line 2. This is your Oregon itemized deductions without the
claim of right deduction ............................................................................................ 3.
4. Enter your Oregon standard deduction (Form 40, line 26; Form 40N or 40P,
line 44) .......................................................................................................................... 4.
5. Is line 3 larger than line 4?
Yes. Enter zero.
No. Enter line 4 minus line 3 .............................................................................. 5.
6. Line 2 minus line 5. This is your Oregon addition if you take the Oregon
Claim of Right credit instead of allowing the deduction to flow through ........ 6.
*For tax year 2012 and prior, add the special medical deduction claimed on line 46 to the amount on line 43.
Form 40 filers, enter the amount from line 6 as an “other addition” (line 10). Use addition code 103.
Form 40N or 40P filers enter the amount from line 6 as a negative amount on the “other deduction and modification” line
(line 46). Clearly place a minus sign in front of the number. Use modification code 649. If you have more than one “other
deduction and modification” you will need to use Schedule OR-ASC-N/P.
Example 4
In 2012, Adam was required to repay $5,000 of unemployment income from 2011. On his 2012 federal return, he included
the claim of right deduction on Schedule A ($5,000). The federal deduction was more beneficial because he’s in a higher tax
bracket in 2012 than he was for 2011. For Oregon, he needs to determine whether he should allow the deduction to flow
through to his Oregon taxable income or claim the credit instead.
Adam uses the worksheet from page 1 and calculates the credit as $450, the difference he paid in tax on this income for
2011. Because Adam claimed the deduction on his 2012 federal return he must fill out the addition worksheet and complete
the deduction worksheet to see if he should allow the deduction to flow through on Schedule A or claim the Oregon credit
instead. His 2012 federal itemized deductions of $20,000 less $12,000 of Oregon taxes, leaves him Oregon itemized deduc-
tions of $8,000.
Do not attach this worksheet to your Oregon return. Keep it with your tax records.
150-101-168 (Rev. 12-14)
Page 4
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