The Oregon Form 40P that is used for part year residents has a section for Subtractions for lines 32 to 34. Even though line 19(S) is supposed to include the amount of SS benefits apportioned to Oregon, the Oregon Form ASC NP that is used for adjustments does not have any code assigned to non-taxable Social Security income as a subtraction! This is why Social Security is not being subtracted on the Oregon form.
When you are entering information in the Oregon Source Income and Adjustments section to apportion your Federal income amounts that were earned in Oregon, exclude the Oregon portion amount of Social Security income from the Unemployment, Social Security, and Other Taxable Income area. If the only income for that box is Social Security income, then enter a zero in that box. This will allow the Social Security amount apportioned to Oregon to be correctly non-taxable.
I did a mock return using the desktop version of TurboTax and followed the above guidance and this did result in a 0 for the Oregon portion of taxable Social Security and there was no error associated with that entry.
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