For Oregon Form OR-40 Schedule OR-A, how to enter local tax withheld as shown on W-2 box 19 so that the amounts are included on line 5 of Schedule OR-A?

[stroudfey]

These local tax withheld amounts are included in Form 1040 Schedule A line 5a but do not show up on the Oregon Itemized deductions for taxes paid.

[shachiagarwalla]

Even I am seeing the same issue. Talked to TurboTax on phone and they do not know what is wrong and have raised a ticket with Tech Support (no way to track it though). They asked me to file by mail after correcting by hand if the issue is not resolved within a week- frustrating.

For me, there is another issue where the one of 4 estimated quarterly payment for local tax is also not being added to Line 5 in Schedule OR-A. I think this is also a bug in TurboTax where they are not counting the estimated payment for 4th quarter since it was made in Jan 2023 (deadline is Jan 15 2023). I changed the date of payment to Dec 2022 and the payment was reflected in Line 5 in Schedule OR-A.

Hopefully we can get it resolved here.

[DMarkM1]

On the estimated quarterly tax payments, TurboTax appears to be handling correctly.  Only payments "in the tax year" are added to line 5a on 1040 Schedule A and line 5 OR form OR-A.  Here is a link to the OR form OR-A instructions.  

Note in the "Taxes you paid" section: 

"You may deduct certain state or local income taxes or foreign income taxes you paid during the tax year, such as income taxes paid to a state other than Oregon, mandatory contributions to certain employment-related programs in other states, and taxes on real or personal property located in the United States that are based on the property’s value (known as ad valorem tax). Income-based taxes paid to a local government within Oregon, such as Portland’s Arts Tax, may be deducted because they’re not paid to the State of Oregon" 

We are still awaiting updates on the "taxes withheld" which were paid in the tax year and should be an OR itemized deduction on form OR-A. 

@shachiagarwalla 

[shachiagarwalla]

So I need to add it to my tax return next year?

Would Federal Schedule-A for itemized deductions do the same thing? i.e. Skip adding the January payment for this year.

Re: "We are still awaiting updates on the "taxes withheld" which were paid in the tax year and should be an OR itemized deduction on form OR-A. "

Is there any way to track this/notified so I can work on my state taxes after that?

@DMarkM1 

[DMarkM1]

Yes and no.  You can enter the estimated taxes paid with the 2023 date and it will not be included on your Schedule A.  You can also not enter it at all this year.  No matter which you choose next year you can include it as "State or Local 2022 tax paid in 2023."  That will add to your schedule A next year.

At this time there is no notification instructions for the OR itemized deduction experience.  In the meantime, using the forms mode in desktop versions "Open Form" and select the OR-A.  Line 5 is a user entered line.  You can enter the amount of local taxes withheld that are part of Schedule A, line 5 (from W2s).    

@shachiagarwalla     

[shachiagarwalla]

>>  In the meantime, using the forms mode in desktop versions "Open Form" and select the OR-A.  Line 5 is a user entered line.  You can enter the amount of local taxes withheld that are part of Schedule A, line 5 (from W2s).    

I am using the web version. Is there a way to do that in the web?

@DMarkM1 

[DMarkM1]

Since the estimated tax amounts seems to carry properly.  You can enter the taxes withheld amount as a local estimated tax paid in 2022.  Delete the "Local Tax" line from your W2 entries so it is not double counted on your Schedule A.  

@shachiagarwalla 

[shachiagarwalla]

So I have submitted my federal tax return already and took standard deduction in that. Can I leave the W2 entries as-is and update "Withholding not already entered..." to reflect it in my OR itemized deductions? I think Federal tax return would not change since I am taking standard deduction anyways, right?

@DMarkM1 

[DMarkM1]

Yes.  You are correct.  If you took the standard deduction, the 1040 Schedule A will not be a factor on your federal return.    

You can make the withholding entries in the "Estimates and Other Taxes Paid" topic that will carry to OR form OR-A line 5, itemized deductions as well as 1040, Schedule A, line 5a.

Here are the steps:

1. "Deductions and Credits"
2. "Estimates and other taxes paid"
3. "Income Taxes Paid"
4. "Withholding not already entered..."
5. "Locality Withholding"
6. Select the "Multiple localities or not listed" option
7. Total the local withholding on your forms W2 that is not showing and enter the amount

@shachiagarwalla