The Oregon Department of Revenue is notifying taxpayers that the federal government has retroactively extended many tax breaks that may affect their 2019 and 2018 tax filings. A few of these tax breaks, commonly called tax extenders, may impact Oregon personal income tax, fiduciary income tax, or corporate tax returns.
Revenue has 2019 forms available that include the provisions of the recently passed extenders. They are in the process of updating the forms and instructions for tax year 2018.
Extended tax breaks that impact Oregon personal income tax include:
- Tuition and fees.
- This deduction is claimed on federal Forms 1040 or 1040-SR.
- The associated Oregon subtraction is available for taxpayers who claimed federal education credits.
- If you made this claim on your 2018 return and were recently billed by Revenue, you don’t need to file an amended return. Revenue will reverse a previous denial of this deduction.
- Adjusted gross income percentage floor for medical expense deductions.
- Medical and dental expenses over 7.5% (not 10%) of the taxpayer’s adjusted gross income can be itemized for 2019 (The 2018 percentage was 7.5%.).
- The Oregon special medical subtraction calculation is also impacted.
- Mortgage insurance premiums itemized deduction.
- These can be deducted on Schedule OR-A.
- Mortgage indebtedness exclusion.
- This income may have been included on a 2018 return but no longer needs to be.
The tax extender that impacts Oregon corporate income and excise tax:
- Work opportunity credit wages subtraction.
- These amounts can continue to be subtracted on the Oregon return if not deducted on your federal return.
If you plan to amend your 2018 personal income tax return for any of the above items, we recommend filing your 2018 amended return first and wait a few weeks before filing your 2019 return. This will prevent any Oregon surplus credit (kicker) you may receive on your 2019 return from being adjusted if your 2019 return processes before your 2018 amended return.
Visit www.oregon.gov/dor to get tax forms, check the status of your refund, or make tax payments; call 800-356-4222 toll-free from an Oregon prefix (English or Spanish); 503-378-4988 in Salem and outside Oregon; or email questions.dor@oregon.gov. For TTY (hearing or speech impaired), call 800-886-7204.