Why does Oregon tax Stimulus checks as income but not federal?
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Oregon does not tax stimulus checks. It just seems that way. Oregon is one of six states that has a limited subtraction for federal taxes paid as part of its state income tax calculation. When you receive a stimulus, you lose some or all of the subtraction for federal tax paid, so your OR refund can go down.
Under current Oregon law, taxpayers’ federal income tax subtraction will be reduced by the combined total of their stimulus payments. This means some Oregon income tax filers may owe state tax on more of their income and, therefore, may have a larger Oregon income tax bill or a reduced refund. According to a report by the Legislative Revenue Office (LRO), the average impact to affected taxpayers is estimated to be $90 to $170.
Learn more at Are the federal stimulus payments taxed in Oregon?
Oregon does not tax stimulus checks. It just seems that way. Oregon is one of six states that has a limited subtraction for federal taxes paid as part of its state income tax calculation. When you receive a stimulus, you lose some or all of the subtraction for federal tax paid, so your OR refund can go down.
Under current Oregon law, taxpayers’ federal income tax subtraction will be reduced by the combined total of their stimulus payments. This means some Oregon income tax filers may owe state tax on more of their income and, therefore, may have a larger Oregon income tax bill or a reduced refund. According to a report by the Legislative Revenue Office (LRO), the average impact to affected taxpayers is estimated to be $90 to $170.
Learn more at Are the federal stimulus payments taxed in Oregon?
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