Oregon First Time Home Buyers account

[beckyweaver6202]

It does not appear that I will be able to purchase a home within the time period allowed in the Oregon First Time Home Buyer program, so I closed my account.  How do I record this on my state return in order to have Turbo Tax compute the penalty?  Plus, are there any implications on my federal return?  

[JohnW152]

First, you'll need to add back any withdrawn amounts that you previously subtracted.  

To do this in TurboTax Online: 

1. Select Tax Home in the left pane
2. On the  Hi, let's keep working on your taxes! screen, select the dropdown on the right side of the State Taxes box, then select Start, Continue, Pick up where you left off, or Review/Edit
3. If you land on an Oregon interview page, select Let's get started, Continue or other similar prompt.  Otherwise, in the left pane, select Prepare State, then proceed through the Oregon screens
4. Proceed through the state screens until you get to the Here's the income that Oregon handles differently screen
5. Below Misc adjustments, select Start to the right of Other Additions
6. On the  Do You Have Additions to Federal Income? screen, select Yes, then Continue
7. If the  Here's an addition we've already added to your return screen generates, select Continue
8. On the  Your Additions to Federal Income screen, select the checkbox to the left of If you have an addition to Oregon income that you haven't already entered, then select Continue
9. On the  Other Additions Statement screen, scroll down the Other Additions document until you get to 166:  First-time home buyer savings account nonqualified withdrawal (40, 40N, 40P).  Enter the amount that you previously subtracted in the right (Oregon) column.      Select Continue
10. Then, you'll need to enter the penalty and interest.  Proceed through the state screens until you get to the A few things before we wrap up your state taxes screen
11. Under Other situations, select  Start to the right of Penalty and Interest for Filing or Paying Late
12. On the Will You File or Pay Late? screen, select the checkbox to the left of I owe a penalty for a withdrawal from a First Time Homebuyer Savings Account.  Select Continue
13. On the Penalty and Interest for Filing or Paying Late screen, enter the penalty and interest you owe for your non-qualified withdrawals from the First-Time Homebuyer Savings Account. You'll need to compute the penalty and interest yourself, but see How much is the penalty and when will it be imposed? on Oregon.gov's First-time Home Buyer Savings Accounts page for calculation guidance 
14. After entering the amount, select Continue

For more information, see:

• Penalty and add back for nonqualified withdrawal on page 77 of Publication OR-17
• First-time home buyer savings account nonqualified withdrawal (ORS 316.801, OAR 150-316-0607) on page 63 of the same document, and 
• First-time home buyer savings account (FTHBSA) penalty for nonqualified withdrawal on page 40 of the same document

There are no federal tax implications.