Worksheet Cr - Claim Of Right Income Repayments Page 6
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9Deduction worksheet for Form 40N or 40P filers
Complete two Oregon 40N or 40P tax returns for the year you repaid the income. On the first return, add back the federal
amount deducted or the amount from line 6 of the addition worksheet (page 4). Remember, if your federal deduction is
claimed on Schedule A, the Oregon addition is claimed on line 46, Form 40N or 40P (code 649) as a negative amount, so be
sure to put a minus sign in front of the amount on line 46. If your federal deduction is claimed elsewhere on the federal return,
your addition is entered on line 33, Form 40N or 40P (code 103) with the amount corresponding to the deduction claimed
in each column. Complete the return through the Oregon tax before credits line (Form 40N, line 53 or Form 40P, line 52).
On the second return, allow the federal deduction to flow through to Oregon and complete the return through the Oregon
tax before credits line.
1.
Enter the amount from the tax before credits line from the first return (Form
40N, line 53 or Form 40P, line 52). This is your Oregon tax before credits after
adding back the federal deduction ........................................................................ 1.
2.
Enter the claim of right credit from line 6 of the credit worksheet (page 1) ... 2.
3.
Line 1 minus line 2. This is your Oregon tax before credits minus the claim
of right credit ............................................................................................................ 3.
4.
Enter the amount from the tax before credits line from the second return
(Form 40N, line 53 or Form 40P, line 52). This is your Oregon tax before credits
allowing the deduction to flow through .............................................................. 4.
Compare lines 3 and 4. If line 4 is the same or less than line 3, do not claim the credit on the Oregon return. Instead allow
the deduction claimed on the federal return to flow through to your Oregon return. If line 4 is more than line 3, claim the
Oregon claim of right credit. Remember, you must add back the federal deduction to claim the credit.
Example 5
Now we’ll see if Adam, from example 4, benefits more from allowing the federal deduction to flow through from his federal
Schedule A or claiming the credit for Oregon instead.
Example 5: Adam’s deduction worksheet
1. Enter your Oregon taxable income from Form 40, line 28 .................................. 1.
$135,900
2. If you completed the addition worksheet (page 4), enter the amount from line
6 of the addition worksheet. Otherwise, enter the amount of the claim of right
deduction from your federal return ....................................................................... 2.
4,735
3. Add lines 1 and 2. This is your Oregon taxable income with the required
addition when claiming the credit instead ..........................................................
3.
140,635
4. Calculate the tax using the tax tables or rate charts for the taxable income on
line 3. Be sure to use the current year tables or charts for the year you repaid
the income .................................................................................................................. 4.
12,213
5. Enter the claim of right credit from line 6 of the credit worksheet (page 1) ... 5.
450
6. Line 4 minus line 5. This is your Oregon tax before credits minus the claim
of right credit ............................................................................................................. 6.
11,763
7.
Calculate the tax for the Oregon taxable income on line 1. This is your Oregon
tax before credits with the deduction .................................................................... 7.
$11,787
Because line 7 is more than line 6, Adam benefits more by claiming the credit for Oregon. Therefore, he will claim the addi-
tion of $4,735 on Form 40, (addition code 103) on his 2012 Oregon return. Then he’ll include the claim of right credit of $450
on line 43 and check box 43b to indicate that he has a claim of right credit.
Example 6
In 2012, Megan, an Oregon nonresident, repaid $30,000 of compensation originally received in 2009. She was also a non-
resident in 2009 and $20,000 of the compensation she repaid was taxable to Oregon. Megan claimed the $30,000 repayment
as an itemized deduction on her 2012 federal Schedule A. Now she needs to decide whether to let the federal Schedule A
Do not attach this worksheet to your Oregon return. Keep it with your tax records.
150-101-168 (Rev. 12-14)
Page 6
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