Oregon State Filing is Not Adjusting Income from Kansas

[LemoloLakeKOA]

I'm an Oregon Resident, but made Income in KS & am separately filing a state return there.

I noticed the software is not adjusting my Oregon State Return for the money I made in Kansas.

How Do I get that adjustment made?

[BillM223]

So you are filing a nonresident return for Kansas, and you entered the Kansas data first? This sequence is how Oregon can know what the taxes paid to Kansas were.

A credit for taxes paid to another state is reported on Schedule OR-ASC, section 3 or Schedule OR-ASCNP, section 5. Use credit code 802.

If necessary, go through your Kansas interview again and then run through your Oregon interview, to see if you can get Oregon to notice this.

Note, you are allowed this credit only if Oregon is also trying to tax this income along with Kansas.

[LemoloLakeKOA]

Thank You Bill.  I appreciate the information.

Yes we are filing in KS as a non-resident and I did fill out the KS form before the Oregon form in the software.  I was a little worried I should have completed the Oregon form first.

But it's not the credit for taxes paid that's not being adjusted.  It's the income I made in Kansas that is not being backed out of my Oregon income total.  The software seems to be pulling my Oregon income figure from my Federal form and not backing out the income made in KS, so my tax bill in OR is waaay more than it should be.  It's likely not doing the credit either, but I hadn't gone that far.

[BillM223]

Please look for the credit on form OR-ASC. Your Kansas tax should appear as a credit in Section 3, along with code 802.

It is not uncommon for state to handle double taxation issues this way - one state gives a tax credit equal to the tax paid in the other state, when both states tax the same income.

You are probably thinking of part-year returns, in which case, you normally adjust the income as appropriate for each state.

But when you are a resident in one state and a nonresident in another state (as you are), then this OR-ASC section 3 credit is the way this double taxation is handled.