Oregon allows a deduction for Federal income taxes paid subject to a ceiling. In 2021 the ceiling is $7,050. Although the Federal stimulus payment is not taxable, in effect Oregon is taxing it. The way Oregon does this is by reducing the deduction for Federal income tax by the amount of the stimulus payment.
In my particular case for 2021 I paid $9,313 of Federal income tax. Because I file a joint return we received Federal stimulus payment of $2,800. So the Federal income tax deduction allowable on my Oregon return is $9,313 - $2,800 = $6,513. However, Turbotax is incorrectly showing my deduction to be the full $7,050.
I have reported this issue to Turbotax but the error has not been corrected.
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The error will be corrected and will be able to file on 2/17/2022.
OREGON TAX NOT WORKING YET 2-17-2022
It corrected the amount of the Federal tax deduction and showed the correct refund on my Oregon return. I e-filed and it got rejected. I am not sure what is going. I will try again and see what happens.
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