On my federal return, I'm claiming a $38 foreign tax credit (Form 1040 Line 20).
Oregon publication OR-17 (2023 edition) states the following about subtracting foreign income tax: "Your foreign tax subtraction plus the subtraction for your current federal tax liability plus any additional federal tax paid for a prior year can’t be more than $7,800 ($3,900 if your filing status is married filing separately)."
My subtraction for my current federal tax liability is $0, so this would not appear to be an issue. However, when I input the $38 into TurboTax, it doesn't apply the subtraction to my state return.
Looking more closely at it, it appears that TurboTax is using an outdated rule for determining if the subtraction can be applied. In TY 2019, the guidance in OR-17 was different, stating, "Your foreign tax subtraction plus the subtraction for your current federal tax liability plus any additional federal tax paid for a prior year can’t be more than the 2019 maximum federal tax liability subtraction amount for your filing status shown in Table 7, above." If I applied this logic to my case in 2023, the maximum federal tax liability amount would be $0 (and I therefore couldn't subtract the $38 in foreign tax). This language was changed in 2020 and all subsequent years, however TurboTax still is using the outdated rule, as evidenced by comparing the TurboTax smart worksheet (first image) with the worksheet in the 2023 version of OR-17 (second image):
Line 1 in TurboTax says to enter the maximum amount from an earlier table (which for me is $0); Line 1 in the OR-17 worksheet says to enter $7,800.
TurboTax folks, unless I'm somehow mistaken about this, please fix this issue.
As an aside, another post that appears to be related shows up in search results, but I'm blocked from accessing the contents of it. Link here: https://ttlc.intuit.com/questions/5844571-error-in-tubotax-or-state-if-your-fed-income-tax-subtracti...
