Actually, I believe I now understand how this is managed by TurboTax on the Oregon return. Line 10 on the OR-40 represents subtractions from federal tax liability applied to Oregon income. It's brought over from the federal for 1040. There is a worksheet that supports this amount and the Stimulus amount received (as input in the Federal Review section of the software) is used to reduce the subtraction. This means that income will be higher by the stimulus amount than would ordinarily subtracted from it. Thus, the stimulus shows up as increased income for the Oregon return and taxes are calculated based on that higher amount. I think everything is correctly handled by TurboTax.
