Or. Admin. Code § 150-316-0086

Current through Register Vol. 63, No. 10, October 1, 2024

Section 150-316-0086 - Credit for Income Taxes Paid to Other States - Proof Required and Procedure for Obtaining the Credit

(1) The taxpayer must retain in their tax records and provide to the department upon request the following items:

(a) A complete copy of the other state's income tax return; and

(b) Proof of payment of the tax, such as:

(A) A copy of the check written to pay the tax at the time the other state's return is filed;

(B) Copies of W-2 statements verifying withholding paid to the other state;

(C) A copy of a cashier's check or other negotiable instrument;

(D) A copy of a canceled check showing payment of tax or estimated tax payments; or

(E) A receipt of tax payment.

(2) If the taxpayer is required to amend per section (5) of this rule, the taxpayer must retain a copy of the other state's amended return or audit report, whichever is applicable, and provide it to the department upon request.

(3) The credit may be claimed either at the time of filing the original Oregon return or subsequently. The timeliness of a claim for refund is determined by ORS 314.380 and 314.415.

Example 1: Ben, an Oregon resident, files his 2013 tax return and reports a loss from rental property he owns in Idaho. After an audit by Idaho, certain expenses related to the rental are disallowed resulting in taxable income from the rental. Ben files the amended Oregon return more than three years from the date he filed his 2013 tax return. Notwithstanding the limitations of ORS 314.415, Ben will receive the credit if the amended return is received by the department within two years after the date Idaho issues the audit report that disallowed the expenses.

(4) A taxpayer is allowed a credit for taxes paid to another state when the other state's taxes have been paid. If the other state's taxes have not been paid before the credit is claimed on the Oregon tax return, no credit shall be allowed. Once the other state's taxes have been paid, the taxpayer may file a refund claim in order to receive the credit on the Oregon return. Any refund due to the credit is subject to the limitations provided by ORS 314.415.

(5) If a subsequent change or correction is made to the taxpayer's liability that also changes the credit allowed under ORS 316.082 or 316.131, the taxpayer must amend to correct the Oregon return for which such credit was originally allowed.

Example 2: In 2016, Gary and Joanne file their 2015 joint income tax return and claim a credit for taxes paid to Montana in 2015 of $500. In 2017, after Montana audits their tax return, they receive a refund of the entire $500 (the amount of credit they originally claimed). Gary and Joanne must amend their 2015 Oregon tax return to show that no credit is available for taxes paid to Montana in 2015.

Or. Admin. Code § 150-316-0086

1-69; 12-70; 12-31-81; 12-31-84, Renumbered from 150-316.082; RD 10-1986, f. & cert. ef. 12-31-86; RD 11-1988, f. 12-19-88, cert. ef. 12-31-88; RD 7-1989, f. 12-18-89, cert. ef. 12-31-89; RD 7-1991, f. 12-30-91, cert. ef. 12-31-91; RD 9-1992, f. 12-29-92, cert. ef. 12-31-92; REV 5-2000, f. & cert. ef. 8-3-00; Renumbered from 150-316.082(3), REV 60-2016, f. 8-15-16, cert. ef. 9/1/2016; REV 86-2016, f. 12-28-16, cert. ef. 1/1/2017

Publications: Contact the Oregon Department of Revenue for information about how to obtain a copy of the publication referred to or incorporated by reference in this rule pursuant to ORS 183.360(2) and ORS 183.355(1)(b).

Stat. Auth.: ORS 305.100, 316.082

Stats. Implemented: ORS 316.082