Live in Washington

[taenk]

Live in Washington (no state income tax) and wife works in Oregon. She worked in Oregon for 80 days in 2020 and in Washington rest of year. I am filling out Oregon non-resident form in Turbotax and am unable to find a way to prorate her Oregon income.

[LenaH]

If you need to allocate a portion of wages to Oregon, you will have to indicate that you made wages in another state in your Personal Information section and also add a nonresident return. 

Please follow these steps in TurboTax:

1. With your return open, select My Info in the left-hand menu.
2. Confirm you and your spouse have Washington as your resident state. 
3. Scroll down on the Personal info summary screen to Other State Income, and select Edit.
4. At the Did you make money in any other states? question, answer Yes and make sure your nonresident state(s) are selected from the drop-down.
5. Select Continue to return to your Personal info summary.
6. Click on State on the left-hand side.
7. Add Oregon. 
8. Follow the on-screen instructions.
9. On the screen Oregon Source Income and Adjustments enter your Oregon Wages in the corresponding box. 
10. Click continue

I have attached a picture for additional reference of the screen in which you allocate wages as stated in step #9.

[taenk]

Thank you for the informative reply. I followed your instructions and have one additional question. Her job is based in Oregon so her W2 shows all wages being earned in Oregon and she paid Oregon state taxes on all her 2020 wages. Due to COVID, she actually only worked in Oregon for 22% of the year and in Washington for 78%. So if I enter 22% of her salary on the Oregon Source Income and Adjustments page as you instructed it will not match the wages on her W2 form. Will that cause any issues?

[ToddL99]

It is possible that Oregon will follow-up with questions about the difference between what was reported as OR income on her W-2 and what you report on your OR return, but that is OK.

If you get questions from OR, just provide the explanation that she worked remotely.

[fowellra]

Hello - I attempted to follow your instructions to get to the Oregon Source Income and Adjustments screen with no luck. Are you able to provide more info so I can navigate there? Thank you!

[DianeW777]

Oregon (OR) requires tax to be paid only on the income derived from OR sources.  When you finish the income section of the OR return, first you will see the screen titled 'Here's the income that Oregon handles differently' where you will select  'Done with income'.

Next you will each the screen titled 'Oregon Source Income and Adjustments', where you can enter only the income that should be taxed to OR.

See the image attached below for your convenience.

[fowellra]

Thank you! My screen was a little different so it threw me for a loop! I appreciate your time!

[elizabethmarie]

If I worked from home 100% in 2021 from Washington for the state of Oregon, would my Oregon wages be 0? 

[TomD8]

@elizabethmarie --

If you're a resident of WA, and your work for your OR employer was 100% performed from within WA for the entire year, then yes, your OR income is 0 (zero).

[elizabethmarie]

Thank you! 

[tomaxel]

I don't see this same screen like I have in previous years.  The 2021 TurboTax is not letting me allocate my income by state like in previous years.  I live in WA but pay OR taxes.  I worked from home all year.  Anyone else have this issue?

[tomaxel]

nevermind..found it.

[Jaytam4173]

Where did you find it?  I also didn't see the options I had last tax year.

[ErnieS0]

Here’s how to allocate your Oregon income:

1. Tap State Taxes in the left column
2. Select Your State Returns, then Continue with Oregon
3. Go to the screen “Oregon Source Income and Adjustments”
4. Enter the Oregon portion of federal income in each box

@Jaytam4173 

[Jaytam4173]

Thank you @ErnieS0  ... so his employer states that he has to work 50% of his time in Oregon.  He works closer to 60 - 65% from his home office here in WA, but since he's allowed to claim 50% of his wages as earned in WA state, I can just manually enter 50% of his annual earnings from his W2 in the Oregon Source Income and Adjustments line and he only has to pay state taxes on half of his annual wages, correct?  He has a calendar and mileage log to backup all of his time in the field.