1. Will Oregon tax the rebate?

The federal rebate is not included in your federal adjusted gross income and therefore not included in your Oregon adjusted gross income. Because it is not included in your adjusted gross income, Oregon is not taxing the rebate. However, some taxpayers' federal tax subtraction on the Oregon return may need to be adjusted as a result of the rebate. Oregon allows a subtraction for the federal taxes you paid (there is a maximum limit on the subtraction). Because the rebate represents an advanced reduction in the 2008 federal taxes you paid, you must reduce the 2008 federal tax liability by the rebate for determining the federal tax subtraction (see question 2).

2. What effect will the rebates (and the Recovery Rebate credit) have on the federal tax subtraction on the Oregon return?

Oregon allows taxpayers to reduce their taxable income by the amount of their current year's federal tax liability (up to $5,600). The tax rebates and Recovery Rebate credit (line 70, Form 1040; line 42, Form 1040A; line 9, Form 1040EZ) represent a reduction in your 2008 federal income tax liability. The rebates and credits must be taken into account when you figure your 2008 federal tax subtraction because it may cause a change in your 2008 Oregon federal tax subtraction.

Example 1: Ed and Kathy receive a federal rebate of $2,100 in May 2008. Ed and Kathy receive $600 each and also receive $300 for each of their 3 qualifying children. In March 2009, they file their 2008 federal return and have a $5,000 federal tax liability. When figuring their federal tax subtraction on their 2008 Oregon return, Ed and Kathy will be required to reduce the subtraction by the rebates they received during the summer of 2008.

Ed and Kathy calculate their federal tax subtraction as follows:

1.		Federal tax liability from 1040	$5,000
2.		Additional tax on qualified retirement plans	-0-
3.		Add lines 1 and 2	$5,000
4.		Tax rebates and allowances received from the federal government plus Recovery Rebate credit claimed on Form 1040, 1040A, or 1040EZ	$2,100
5.		Subtract line 4 from line 3 (if less than $0, enter $0)	$2,900
6.		Enter $5,600 ($2,800 if married/RDP filing separately)	$5,600
7.		Enter the smaller of line 5 or line 6 here and on your Oregon return (this is your federal subtraction amount)	$2,900

Example 2: Isabella and Kaleb claim a Recovery Rebate credit of $1,200 on line 70 of their 2008 Form 1040. When figuring their federal tax subtraction on their 2008 Oregon return, Isabella and Kaleb will be required to reduce the subtraction by the amount of the credit claimed.

Isabella and Kaleb calculate their federal tax subtraction as follows:

1.		Federal tax liability from 1040	$3,000
2.		Additional tax on qualified retirement plans	-0-
3.		Add lines 1 and 2	$3,000
4.		Tax rebates and allowances received from the federal government plus Recovery Rebate credit claimed on Form 1040, 1040A, or 1040EZ	$1,200
5.		Subtract line 4 from line 3 (if less than $0, enter $0)	$1,800
6.		Enter $5,600 ($2,800 if married/RDP filing separately)	$5,600
7.		Enter the smaller of line 5 or line 6 here and on your Oregon return (this is your federal subtraction amount)	$1,800

3. I forgot how much my stimulus rebate check was. How can I find out how much I got?

Information about the amount of federal rebate you received is available at IRS.gov.

4. I owe money to the state of Oregon. Will my rebate checks offset to pay for that?

Possibly yes. The stimulus legislation passed by Congress allows federal and state governments such as Oregon to offset debts you owe with the stimulus check. This is called the Treasury Offset Program (TOP).

If Oregon uses your rebate check (or a portion of it) to pay your debt, you will receive a notice explaining why.