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Level 3
posted Feb 10, 2023 2:55:01 PM

Can you deduct the Oregon State transit tax as a federal tax deduction? Where do you list it in Turbotax?

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6 Replies
Level 15
Feb 10, 2023 3:38:33 PM

No, the Oregon state transit tax cannot be claimed as a deduction on your federal income tax return. 

Typically, if a taxpayer is itemizing deductions, they are allowed to claim state and local real estate taxes, state and local personal property taxes, and either state and local income taxes or general sales taxes.  Transit taxes are not taxes of the type allowed to be claimed as an itemized deduction on your federal return.  See Taxes You Paid in the 2022 Instructions for Schedule A

However, the tax may be reflected in Box 14 of your Form W-2.  If it's shown on your W-2, select Oregon Statewide Transit tax in the Category dropdown for Box 14 when you're entering your W-2 information.

Level 3
Feb 10, 2023 6:39:01 PM

Thank you for the response. 

New Member
Mar 31, 2023 1:47:38 AM

Why is it not? It's considered a state wide income tax.

 

From Oregon's own Tax Professional’s Liaison Meeting in 2018 they conclude that it should be fair game for federal Sched A but not state OR-A. 

 

https://www.oregon.gov/dor/programs/taxpro/Documents/tax-practitioner-meeting_07-18.pdf
"The statewide transit tax is an Oregon income tax and can’t be included on Schedule OR-A as state taxes paid. It can be included on the federal Schedule A." -page 6, 4th bullet

 

 

New Member
Jan 9, 2024 1:34:28 PM

Since the Oregon State transit tax is based upon income, it is a state income tax (albeit a special purpose one) and therefore is state and local income which may be included on Schedule A, line 5a.

New Member
Jan 9, 2024 1:37:41 PM

Both are true.  You may deduct the Oregon State transit tax on your Federal tax return, but not on your Oregon tax return for the same reason that you may not deduct Oregon income tax on your Oregon tax return.

Expert Alumni
Jan 10, 2024 10:25:03 AM

There is a discrepancy in some of the answers given in this thread. According to Intuit, "Oregon statewide transit tax withheld {OR}" ( Screen 10, code 230) will include the amount on Federal Schedule A but not the Oregon State return" which confirms JHB_A analysis.