BFresch
Returning Member

Confused About a 1099-R Distribution Impacting Oregon Taxes, when none of the money originated in Oregon

For 2020, I had 100% unemployment income from Oregon; I resided 100% of 2020 in Washington State.  My wife continued to work; 100% of her income was earned in Washington State

I took 2 distributions in 2020 from my IRA's.  One distribution was for a conversion to a Roth IRA; it included enough to cover the Federal taxes.  The other distribution was for $10,000 to put a down payment on a piece of property.

 

When I was processing my Oregon State taxes, I was receiving a refund until I got to the section related to this 1099-R, where I now owe Oregon taxes.  I owe Federal taxes, so I wait to submit until required.

 

I don't understand how Oregon can tax me on "income" related to this 1099-R when $0 came from any Oregon based source.

 

Can someone explain this to me?