Oregon - Metro Supportive Housing Services and Multnomah County Preschool for All Taxes

[ErnieS0]

No. TurboTax does not support the Metro Supportive Housing Services (SHS) Personal Income Tax or the Multnomah County Preschool for All (PFA) Personal Income Tax.

However, SHS and PFA withholding or payments are a local tax deduction if you itemized deductions (file Schedule A) on your income tax return.

To file a SHS or PFA return or make a payment, go to Personal Income Taxes (SHS/PFA) at Portland Revenue Online.

@m-cebula

[m-cebula]

Thank you so very much!

However, annoying that Turbo Tax does not support.

[NickCh]

I’m leaving TurboTax because of this issue, not fully supporting my tax preparation needs. The penalties I incurred due to TurboTax’s incomplete support make of the cost difference of using a local CPA vs. TurboTax. 

[mbpdx]

Please be aware that the city/county are offering amnesty for last year.  But I hear you!

https://www.portland.gov/revenue/policy-penalty-and-interest-amnesty

[Laurelinda]

Beware there are mores issue with TurboTax and the Metro SHS tax. 2022 was the first year we had employer withholding, and so instead of entering quarterly estimated payments for local taxes, I have W2 information for the local tax. The local tax should carry through to become an itemized deduction on my state return. As quarterly estimated payments it did, but as W2 withholding it does not. I have called TurboTax almost every weekend about this bug for over a month and each weekend am told there are known issues with state deductions and to try again on Monday. But nowhere is there a publicly disclosed list of known bugs being worked on, and I had to pay as if I was filing to get access to the forms to even see that this was an issue. Many people may just be trusting TurboTax and filing their returns with itemized deductions that are smaller than they are entitled to. Meanwhile I'm going to ask for a refund if this isn't fixed soon.

[mbpdx]

Thank you for this information.  Can you clarify which line item on the state return one should review to identify this potential issue?

[mbpdx]

Actually local taxes withheld and entered in W2 were not carried over to Oregon Schedule A Line 5.  And while TurboTax allows one to pay the Portland Art Tax it does not appear to keep track of this and enter it on this form either.  

TurboTax Users Check Line 5 of Form schedule OR-A

You can view and edit in Forms View.

“Income-based taxes paid to a local gov- ernment within Oregon, such as Portland’s Arts Tax, may be deducted because they’re not paid to the State of Oregon.” https://www.oregon.gov/dor/forms/FormsPubs/schedule-or-a-inst_101-007-1_2022.pdf

[ora123]

@ErnieS0 Thank you for your answer, probably the most helpful answer in this thread.

I have two follow-up questions:

1. Regarding Schedule OR-A for itemized deductions, can I include both SHS tax withholding (from W-2 Box 19) and the amount of 2021 SHS tax I paid in April 2022 (there was no withholding in 2021)?

2. TurboTax online has put 0 in Schedule OR-A, Line 5. "State and local income taxes", even though I had some withholding for SHS tax reported on W-2 this year. In the questionnaire it only asks about taxes paid to other states, but not about local taxes paid to government agencies other than State of Oregon. Portland Metro is a separate entity from State or Oregon. How can I change the amount on this line in TurboTax online?

[updatedbutnot]

Thanks for @mbpdx and everyone else chiming in on this.  The rollout of these taxes is indeed an embarrassment to the city/county.  Amnesty for unpaid taxes for 2021 was the least they could have done.

That having been said, I suspect many Oregonians who can now add these taxes to form OR-A, line 5, may find they have already reached the $10,000 limit through other means.

[ora123]

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@updatedbutnot wrote:

That having been said, I suspect many Oregonians who can now add these taxes to form OR-A, line 5, may find they have already reached the $10,000 limit through other means.

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I would not make such assumption. For me, reporting SHS tax on OR-A line 5 will actually help maximize the deduction. The other two components in the "Taxes paid deduction" capped at $10,000 are real estate taxes and personal property taxes. I think most Oregonians don't have personal property tax, and have less than $10,000 in real estate taxes.

[Laurelinda]

@ora123 , regarding your 2nd question, yes...this is the exact problem I referred to above. There is no apparent way to fix this other than to enter the amount in the TurboTax section for "other taxes not included on W2", which will then make your federal Schedule A incorrect (although assuming you hit the 10k deduction cap, it won't actually impact your federal taxes themselves). TurboTax keeps saying they will fix this but it hasn't happened yet.

[Laurelinda]

@ora123 , regarding your 1st question (Can I include both SHS tax withholding (from W-2 Box 19) and the amount of 2021 SHS tax I paid in April 2022 (there was no withholding in 2021)?), yes, that is consistent with the instructions for Oregon income tax.

[updatedbutnot]

@ora123 I stand corrected!  Forgot that this is obviously not the same $10K federal limit of SALT.

[mbpdx]

I hadn’t hit the Oregon $10k limit.  Manually editing the form to include local taxes withheld resulted in $300 reduction in state taxes.  But now it looks like I had too much withheld and will get a refund for Metro/Mult.  Very messy process that I would hope Intuit would address rather than leave it to the novices to stumble through.  Is there an official Intuit response?  Even before these new taxes it appears the Portland art tax should have been in Oregon Schedule A….

[updatedbutnot]

@Laurelinda I wanted to see if the federal Schedule A is affected by this, but at least in my case, it's not.

I looked at how the federal Schedule A number is determined in Turbotax.  These local taxes are already included in that calculation, provided your W-2 has them listed.  I see it on the "State and Local Tax Deduction Worksheet."

I believe in Turbotax--> Federal Taxes --> Deductions & Credits, you could also enter them under "Other Income Taxes Paid in 2022"