Turbotax is wrong. From Oregon publication 17 on page 72, the following worksheet (Part C) is used to determine this FTC subtraction. The AGI limits only come into play only in step 2, which is your federal tax subtraction allowed for lower income Oregon taxpayers, NOT in step 1. Step 1 is set at $8250/$4125. We had examples of this in our TaxSlayer (another tax program) tutorials, and the deduction was $3000 even for higher income taxpayers.
I will override by going to the "Other Subs" form, and in Part C in the middle of the form, override line 1 with $8250 to get the FTC subtraction.
Part C: Foreign income tax subtraction
[Subtraction code 311] [Modification code 603]
If your total federal tax subtraction (Part A, line 11 plus Part B, line 5) is $8,250 ($4,125 if your filing status is married filing separately), Stop—you can’t subtract your foreign tax (ORS 316.690). Otherwise, continue to Step 1.
1. Enter $8,250 ($4,125 if your filing status is married filing separately). 1.__________
2. Enter your total federal tax liability subtraction (Part A, line 11 plus Part B, line 5). 2.__________
3. Line 1 minus line 2. 3.__________
4. Enter the amount paid in foreign tax, but not more than $3,000 ($1,500 if your filing status is married filing separately). 4.__________
5. Enter the smaller of line 3 or line 4 here and on Schedule OR-ASC section B (subtraction code 311) or Schedule OR-ASC-NP section D (modification code 603). 5.__________
