Your state tax situation will not affect your federal return @outdoorjunkies. The IRS is interested in federal income, not Oregon income.
If TurboTax files your federal and state returns together, it knows to send your federal return to the IRS and the state return to Oregon.
If you deducted Oregon state tax withheld on your federal return and got the whole amount back as a refund, that refund will be reported on next year's tax return – and Oregon will send a Form 1099-G to you and the IRS so there will be no confusion.
You are correct that Oregon does not tax an employee working remotely in Washington. Oregon says: "Compensation for personal services performed by a nonresident employee wholly outside this state and in no way connected with the management or conduct of a business in this state is excluded from gross income."
Rule 150-316-0165
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