TurboTax is entering the $2400 stimulus amount in Oregon OR-40 form line 10, reducing the Fed Tax paid deduction.

[dougro]

Entering the info into TurboTax on the amount of the stimulus checks received caused my Oregon tax to go up. OR form 40 instructions say to put the amount from 1040 line 30 into OR-40 line 10. My 1040 line 30 is blank but the $2400 somehow gets into the OR form 40 line 10 "2020 federal tax liability subtraction". This is the OR-40 instruction:

"8. Enter the tax rebate (economic stimulus payment) you received from the federal government in 2020 plus your recovery rebate credit, if any (Form 1040 or 1040-SR, line 30)."

This subtracts the stimulus amount from the amount of Fed Taxes paid.

[SteamTrain · Accepted solution]

That may be correct if the 2400 you are talking about is form the first stimulus and already received...look at it again (and I'll bold underline the critical parts )

_______________________

"8. Enter the tax rebate (economic stimulus payment) you received from the federal government in 2020 plus your recovery rebate credit, if any (Form 1040 or 1040-SR, line 30)."

________________________

i.e. they seem to want it to be both the early stimulus already sent out to you in 2020....plus line 30.  Your line 30 appears to be empty, so nothing beyond the first stimulus is added....but the first stimulus is included in the total.   

You could call OR tax authorities and see if that is really what they intended.....telephone numbers are in their instructions booklet/pdf, but they certainly may be getting a fair number of calls about this....and could have an answer ready.

[dougro]

Thanks, SteamTrain, I read that the Stimulus would not be taxed by Oregon but this effectively does tax the $2400 stimulus check. I'll check with the state if I can get anyone on the phone. 

[fanfare]

there's nothing mysterious here. That's how the Oregon tax return works. Don't bother calling.

[Marymneal]

Yes...same on free tax USA. Oregon is taxing stimulus when we told it would not be.

[its]

Oregon is taxing the stimulus  

[MaryM428 · Accepted solution]

In some cases TurboTax started the refund assuming that no stimulus had been paid.  So the tax return started with a refund for the amount of both stimulus checks.

If you did not receive the stimulus checks, then that amount will appear on Line 30 of the 1040 and that amount will be added to your refund or a credit against any tax due.

Because you told TurboTax that you did receive the stimulus, Line 30 will be blank and the amount that your received will be subtracted from your refund credit.

The state of Oregon is imposing a tax on the amount of stimulus that you did receive.  That amount will flow from the federal to the Oregon state return and Oregon state will use that to calculate the taxes to be paid to Oregaon state.

[dougro]

Thanks MaryM428, I did get in touch with the state and you are correct.

[Donz2]

I'm ready to file my Oregon tax return but TurboTax is still only adding back $2,400 of stimulus money while Oregon requires us to add back all the stimulus money we received - $3,600.  I haven't found any place to enter it.  Can someone tell me if there's a better way to handle it than to over-ride line 8 on the federal tax liability subtraction worksheet?  And, how soon will TT be up to speed on including both stimulus payments?  Thank you.

[DMarkM1]

A work around you can use is to put the entire amount you received for rounds one and two in the round one box.