The IRA is not subject to tax in Oregon, but all of your income may appear on the Oregon return. What Oregon does is pretend that all of your income is taxable in Oregon, figure out the tax, and then prorate the result to the percentage of income earned in Oregon. The program will not calculate tax on your IRA withdrawal to Oregon because you are not an Oregon resident, but the income is still listed on your Oregon return because all of your income appears on your Oregon return.
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