I live in Washington State and work in Oregon; however I work remotely from home in Washington 2days a week. Are there any adjustments I can make to my state return?

[grimmdsam]

Do I need to document a home office in order to this or not?

[DS30 · Accepted solution]

Yes. There is no OR state adjustment specifically related to working remotely but you only need to allocate the work actually performed in OR on your OR nonresident state income tax return. So when you are working on the Oregon Income and Adjustments (see screenshot) you will only need to allocate that portion of your wages to OR that was for work actually performed in OR.

If you are a WA resident and you are working remotely from home, then this portion of your earned wages will be considered WA-sourced income (since income is sourced to where the work is performed).

You can divide your wages between OR and WA based on the amount of days you worked in each state.

[AH15]

Hi,

Where in my Oregon tax form should I claims the days I worked from home in Washington State?

Thanks

[KarenJ2]

You will need to calculate your OR wages separately from the return.  

Please see more information on page 14, 2019 Publication OR-40_NP Oregon

Nonresidents—enter the amount you earned while working in Oregon for each job. If that amount differs from the Oregon wages on your Form W-2, request a signed statement from your employer verifying the number of days worked in Oregon and the total number of days worked everywhere. Keep this document and a statement explaining your calculations with your records. If your Oregon wages aren’t stated separately on your Form W-2, compute your Oregon-source income using the following formula: Days actually worked in Oregon × Total wages (line 7F) = Oregon wages (line 7S) Days actually worked everywhere Don’t include holidays, vacation days, and sick days as days actually worked. However, you must include sick pay, holiday pay, and vacation pay in total wages. See the example below. If Oregon is the only state you worked in, don’t use this formula; all your earnings are taxable and should be reported in the Oregon column. 

[dzana]

Will doing this, and thereby paying less OR state income tax, increase our federal taxable income for the FOLLOWING year?

For example, in my 2019 taxes, i report only 60% of my wages were earned in Oregon. On the days i work in WA, i should pay no OR state income tax. This increases my OR state tax refund.

Then when it comes time to do my 2020 taxes, will I have a higher taxable income than the previous year because of the additional OR return received? (And therefore may get a reduced federal return?)

[JotikaT2]

Potentially.

But as mentioned in the steps in the prior response, this is the correct method to report your state wages and taxes as they are earned in each state.

[Hal_Al]

Q. Will doing this, and thereby paying less OR state income tax, increase our federal taxable income for the FOLLOWING year?

Simple answer: No.

But it depends on the details.  You are allowed to deduct, on the federal return, state income tax withheld. But you are not required to so, if you know it will only be refunded.  Furthermore the state income tax deduction is only an itemized deduction, subject to limits.  If you get not tax benefit from entering it on your 2019 tax return, you do not have to report it as income on your 2020 tax return.

If you get a reduced federal  tax return in 2020 it generally only balances off the increased 2019 return.  I say generally, because taxes are complicated,and changes in total income can sometimes affect refundable tax credits. 

If it's bad enough, you can then just file an amended 2019 return and undo it.

[rizz1]

I am having trouble figuring out where to list this adjustment. There isn't an adjustment in the Oregon state section that makes sense for this situation. Do I just do the math of days worked in OR VS days worked in WA and enter it into the income section where I input my W2 information? So box 16 is my true "Worked in Oregon" income?

[DianeW777]

Yes, you can certainly do that.  This usually makes a simple process of moving the correct taxable income to the right state.  You can also use the information below to confirm you OR nonresident income is accurate or change it.

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.

[dmurfin25]

What if you live in Washington and only work remote with Oregon wages. 

[TomD8]

@dmurfin25 --

If you are a non-resident of Oregon and your work is never actually (physically) performed in Oregon, then the income from that work is not subject to Oregon taxation.

A small handful of states tax non-resident remote workers.  Oregon is not one of them.

[Entheo]

Greetings,

Does this mean that you should not see OR taxes deducted from each paycheck if you are working remotely 100% in WA. Even though the nearest office is located in OR?

[Entheo]

Greetings,

Does this mean that you should not see OR taxes deducted from each paycheck if you are working remotely 100% in WA. Even though the nearest office is located in OR?

[TomD8]

OR employers with nonresident employees working outside the state are NOT required to withhold OR taxes on those wages.

https://www.oregon.gov/DOR/programs/businesses/Documents/PayrollSlideshow.pdf