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Additions

Accumulation distribution from a trust 

ORS 316.298

[Addition code 100]

Did you receive a distribution of a trust's accumulated income from prior years? If so, it is fully taxable on your Oregon return. Oregon has no "throwback" provision for reporting this income the way the federal government does. However, Oregon will allow you a credit for the Oregon income tax paid by an Oregon trust. The tax must have been paid in past years on the same income that was distributed to you this year. For details, call the Department of Revenue or email the Fiduciary Unit at estate.help.dor@oregon.gov.

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Alternative Fuel Vehicle Fund (auction)

ORS 316 Oregon Laws 2013

[Addition code 104]


If you claimed a deduction on Schedule A for the amount you paid for your Alternative Fuel Vehicle Fund tax credit, you will have an Oregon addition for the amount of your deduction.

Example: Roberta bid on $3,500 worth of Alternative Fuel Vehicle Fund credits during the 2013 auction. She won all the credits she bid on and paid $3,400 for them. On her Oregon return, Roberta will claim an Alternative Fuel Vehicle Fund credit of $3,500. If she claims the $3,400 she paid for the credits as an itemized deduction on her Schedule A, she must add that amount to her income as an Oregon “other addition”. For more information see the Alternative Fuel Vehicle Fund credit information.
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Child Care Fund contributions ​ 

ORS 315.213

[Addition code 104]

If you claimed a deduction on Schedule A for the amount you paid for your Child Care Fund contribution tax credit, you will have an Oregon addition for the portion of your deduction included in your credit.

Example: Fern made a contribution to the Child Care Fund in the amount of $10,000. On her Oregon return she will claim a credit of $7,500 for her contribution (she is limited to 75 percent of her contribution, or her tax liability, in any given year). If Fern claims the $10,000 contribution as an itemized deduction on her Schedule A, she must add back t$7,500 to her income using addition code 104.

Click here for more information on the Child Care Fund tax credit.

Part-year residents and Nonresidents

For instructions on how to claim your addition as an "other deduction and modification," see the Deductions and Modifications section.

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Claim of right income repayments

ORS 315.068

[Addition code 103]

Did you repay over $3,000 of income taxed by Oregon in a prior year and claim a federal claim of right deduction or credit under IRC § 1341? If so, you may claim an Oregon credit based on the Oregon tax you paid in that earlier year for the income that you repaid. Repayments of $3,000 or less do not qualify for an Oregon credit.


If you claimed a federal deduction on Schedule A for your repayment, you must add back your federal
deduction to claim a credit on your Oregon return. See Oregon claim of right income repayment for more information.
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Depletion 

ORS 316.680(2)(d)

[Addition code 101]

Depletion is using up natural resources by mining, quarrying, drilling, or felling. The depletion deduction allows an owner or operator to account for the reduction of a product's reserves.

If you claim percentage depletion on your federal return, you must add to your Oregon income any depletion that is more than your adjusted basis in the property. The addition includes any depletion in excess of basis taken by an S corporation or partnership of which you are a shareholder or partner. Usually you need to add to Oregon income any depletion that is a preference item subject to the federal alternative minimum tax.

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Discharge of indebtedness from reacquisition of debt instrument 

ORS 316.739

For tax years 2009 and 2010 Oregon was not tied to the deferral and required an addition on your Oregon return. Beginning in 2011 Oregon is tied to this federal law and no addition is required.

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Disposition of inherited Oregon farmland or forestland 

ORS 316.844

[Addition code 106]

You may have an addition on your return if:

  • You dispose of farmland you inherited from someone who died on or after October 5, 1973, and before January 1, 1987, or
  • You dispose of forestland you inherited from someone who died on or after November 1, 1981, and before January 1, 1987.

You may have this addition because the valuation of the land for Oregon inheritance tax purposes may differ from the valuation for federal estate tax purposes. Generally, the federal valuation is the fair market value of the property at the date of the previous owner's death. The Oregon valuation is usually less than the federal valuation, because for inheritance tax purposes the property may have been valued as farm-use or forestland.

Farm-use value. If the previous owner died on or after October 5, 1973, but before September 12, 1975, use the farm-use value for the year preceding death. If death occurred on or after September 13, 1975, use the farm-use value for the year of death. You will not have this addition if the carryover basis was elected for a death after December 31, 1976, but before November 7, 1978.

Forest-use value. Use the forest-use value for the year of death.

How to figure the addition. This addition is equal to the difference between:

  • The taxable gain or loss, using the Oregon valuation as your basis, and
  • The taxable gain or loss, using the federal valuation as your basis.

This addition will increase the gain or reduce the loss you reported on your federal return.

Transfers of property. An addition is required when the beneficiary sells the inherited property. It is also required when:

  • You recognize gain or loss on property that acquired the inherited property's basis due to a nontaxable exchange or involuntary conversion.
  • You recognize gain or loss on property you received as a gift from a donor who inherited it.
Example: Anne inherited farmland from a relative who died on March 1, 1982. She sold the land on May 1, 2013, for $1,100,000. The fair market value at the date of the relative's death was $180,000. The farm-use value of the land on the 1982-83 property tax statement was $50,000. Anne must show a $130,000 addition on her 2013 Oregon return. Here is how she figures her addition: Transfers of property addition example

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Federal election on interest and dividends of a minor child 

ORS 316.372

[Addition code 107]

Did you report the interest or dividends of your minor child on your federal return? If so, you must add the amount subject to the special federal tax to Oregon income. You must also include any interest or dividends your child received on bonds or notes of another state or political subdivision of another state that you did not include on your federal return.

Full-year residents. Oregon taxes the smaller of line 13 or 14 from federal Form 8814. Oregon also taxes any interest or dividends your child received from state and local governments outside Oregon.

Part-year residents. Oregon taxes the interest and dividends your child received while you were an Oregon resident.

Nonresidents. Oregon generally does not tax interest or dividends received while you were a nonresident.

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Federal estate tax 

ORS 316.680(2)(c)

[Addition code 100]

Federal estate tax on "income in respect of a decedent" (IRD) is allowed as a deduction on your federal return. If any of this tax is on income not taxed by Oregon, you must show an addition on your Oregon return.

Use the following formula to figure the Oregon addition:

Federal estate tax addition formula
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Federal income tax refunds 

ORS 316.685

[Addition code 109]

Did you get a federal tax refund because of a federal audit or amended return? If so, you may need to add part or all of that refund to your Oregon income. Read the explanation of the federal tax liability subtraction.

Tax benefit doctrine. You need to add back only refunds of federal tax for which you received a benefit in a prior year.

Example 1: Rosa subtracted her entire federal tax liability of $2,800 on her 2012 Oregon return. This year, she amended her 2012 federal return. Rosa reduced her federal tax to $2,300 and received a federal refund of $500. She received a $500 tax benefit because she subtracted $500 more on her 2012 Oregon return than her corrected federal tax liability.

When to report the refund. As a general rule, report the refund in the year you get it. The rules for figuring the addition are explained below. But first, note these exceptions:

Exception 1
If there is an error on your federal return, the Oregon Department of Revenue may correct your federal tax liability when your Oregon return is processed. This may decrease your federal tax subtraction. When the IRS later refunds the difference between your correct federal liability and the liability on your original return, do not report the refund as an addition. Because the tax subtraction on your original Oregon return was corrected, you didn’t receive a tax benefit from the total federal tax subtracted on your original return.

Example 2: The Jacksons showed a $3,700 federal tax liability on their 2013 federal return. They claimed a federal tax subtraction for that same amount on their Oregon return. When their 2013 Oregon return was processed, the Oregon Department of Revenue discovered a math error on their federal return. The department figured the Jacksons’ correct federal tax as $2,400 and reduced their Oregon federal tax subtraction to that amount. In 2014, the Jacksons received the IRS refund of $1,300. They will not report the refund as an addition on their 2014 Oregon return because they did not receive a tax benefit for it. 

Exception 2
If you file an amended return before the filing due date for that tax year, your amended return is treated as your original return for that year. In this case, the federal tax subtraction on your amended return is your corrected federal tax liability.

Example 3: Heather filed her 2013 federal and Oregon returns on February 17, 2014. Her federal tax liability was $4,800, which she subtracted in full on her Oregon return. On March 20, 2014, she amended her 2013 federal return to claim additional deductions. She refigured her 2013 federal tax as $3,000. She also amended her 2013 Oregon return to claim the same additional deductions and reduce her federal tax subtraction by $1,800 (from $4,800 to $3,000). The $1,800 federal refund she received in 2014 will not be reported as income on her 2014 Oregon return. Because Heather filed the amended Oregon return before the April 15 due date, her amended return is treated as her original return this year.

Figuring the addition. The refund you must report as an addition is the amount of refund that you received a tax benefit from. The tax benefit is the amount of federal tax you deducted in a prior year and received as a refund in a later year (if the amount you got back reduced your Oregon taxable income in the prior year). 

Did you receive a refund of federal taxes from a different year? If so, use the following worksheet to figure your tax benefit.


1. Fill in your original federal tax liability from a prior year (2012 limit $6,100, 2011 limit $5,950, 2010 limit $5,850). 1._________
2. Fill in your corrected federal tax liability from a prior year (2012 limit $6100, 2011 limit $5,950, 2010 limit $5,850). 2._________
3. Line 1 minus line 2. This is the tax benefit you received from your refund. 3._________


Example 4: Jill’s 2012 federal tax liability was $6,300. She was limited to $6,100, which she subtracted on her Oregon return. Jill amended her 2012 federal return and received a refund of $6,300 in 2013. The addition on Jill’s 2013 return will be $6,100, figured as follows:

1. Tax benefit received: Federal tax subtracted on Jill's 2012 Oregon return (limit $6,100) $ 6,100
2. Less: Corrected federal tax ($6,300 - $6,300) (limit $6,100) -0-
________
3. Tax benefit received and Jill's Oregon addition $ 6,100

Example 5: Ella was a part-year resident in 2012. Her original federal tax was $4,200. She amended her 2012 federal and Oregon returns in October 2013. She received a $1,000 federal refund in 2013. Her 2012 corrected federal tax is $3,200. Ella's addition is $1,000. She figures her tax benefit as follows:
1. Original 2012 federal tax liability (limit $6,100) $ 4,200
2. Less: Corrected federal tax liability (limit $6,100) - 3,200
________
3. Tax benefit received and Ella's Oregon addition $ 1,000

Nonresidents. A nonresident’s tax benefit from federal tax refunds is the difference between the tax actually subtracted on the prior year’s return and the tax that would have been subtracted had the federal return been correct. If the amounts on your federal return changed because you amended your federal return or because it was audited, your Oregon percentage may also change.
Use the corrected percentage to figure the tax benefit.


Example 6: Brokston was a nonresident with Oregon-source income in 2012. His original federal tax was $8,600. His Oregon percentage on Form 40N was 40 percent. In September 2013, he amended his federal and Oregon returns. He received a $4,500 federal refund in 2013. His revised Oregon percentage for 2012 was 50 percent. He received a $390 tax benefit from the refund. He figures his tax benefit as follows:

1. Original federal tax liability (limit $6,100)
x original Oregon percentage
$ 6,100
x      .40
$2,440
2. Corrected federal tax liability (limit $6,100)
x revised Oregon percentage
$4,100
x      .50
-2,050

3. Tax benefit received and Brookston's Oregon addition $ 390
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Gambling losses claimed as an itemized deduction 

ORS 461.560

[Addition code 105]

If you claimed gambling losses as an itemized deduction on your federal Schedule A, you may have an addition on your Oregon return.

Your gambling losses are limited to the amount of your gambling winnings taxed by Oregon.

Oregon does not tax Oregon Lottery winnings of $600 or less from a single ticket or play. See the subtraction for Oregon Lottery winnings.

Example: Angela reported total gambling income of $580 on her federal return ($500 from the Oregon Lottery plus $80 from the horse races). On her federal Schedule A, Angela deducted $300 of gambling losses.

Angela will subtract $500 from her Oregon income. This is the amount of her Oregon Lottery winnings. Her net gambling winnings, taxable by Oregon, are reduced to $80. Angela may not claim more in gambling losses than her gambling winnings taxable by Oregon. Because her gambling winnings taxable by Oregon are only $80, she may not claim more than $80 in gambling  losses on her Oregon return. She is required to reduce her deduction for gambling losses from $300 to $80. The difference of $220 is an Oregon addition.

Gambling winnings reported in federal AGI $580
Less subtraction for Oregon Lottery winnings (500)
_________
Net gambling winnings taxable by Oregon $ 80
Gambling losses claimed on federal Schedule A $ 300
Net gambling winnings included in Oregon income

80
________

Reduction in gambling losses - Oregon addition $ 220
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Income taxes paid to another state  

ORS 316.082

[Addition code 104]

Did you claim a credit for income taxes paid to another state and claim those same taxes as an itemized deduction? If so, you may have an Oregon addition.

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Individual Development Account 

ORS 316.848, 315.271

[Addition code 113]

For information on the required Oregon addition, see the Individual Development Account section on the Other Items page.

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Interest and dividends on government bonds of other states

ORS 316.680 (2)(b)

Full-year residents. Oregon taxes interest and dividends on bonds and notes of another state or political subdivision of another state that you did not include on your federal return. This income is an addition on your Oregon return.

Did you report the interest or dividends of your minor child on your federal return? And, did your child receive interest or dividends from another state or political subdivision? If so, include this income as an addition on your Oregon return. Read Federal election on interest and dividends of a minor child.

Part-year residents. Oregon taxes all interest and dividends you earned on all bonds or notes when you were an Oregon resident. Oregon also taxes the interest and dividends on bonds or notes of another state (or political subdivision of another state) earned from an Oregon business, partnership, or S corporation during the part of the year you were a nonresident.

Nonresidents. Oregon will only tax this income if it comes from an Oregon business, partnership, or S corporation.

Expenses

Investment expenses to purchase federally exempt bonds or notes are not deductible on the federal return. If you itemize for Oregon, you may reduce your Oregon addition by the amount of investment expense not deductible on your federal return. If you use the standard deduction, you will not reduce your addition for your investment expenses.

Example 1: Maya received $1,000 of interest from her New York City bonds. She borrowed $2,600 to purchase the bonds. During the year she paid $150 of interest on the loan. She claimed itemized deductions but could not deduct the interest expense on her federal Schedule A because the interest from the bonds was not included on her federal return. Maya's $850 addition is figured as follows:

New York City bond interest $1,000
Less: Interest expense connected with the bonds - 150
_________
Oregon addition $ 850


Example 2: Jim received $2,970 of interest from Idaho Municipal Bonds. He borrowed $12,000 to purchase the bonds. His interest expense on the loan was $650. Jim used the standard deduction on his federal and Oregon returns. He will have an Oregon addition of $2,970. Jim will not reduce his addition for his loan interest expense because he claimed the standard deduction.

You will have an Oregon addition for interest or dividends on obligations of any authority, commission, instrumentality, or territorial possession of the United States. These are exempt from federal tax but not Oregon tax.

Oregon does not tax interest or dividends on obligations that states cannot tax under federal law. Examples of such obligations are bonds issued by:

  • Territory of Guam.
  • Commonwealth of Puerto Rico.
  • Territory of Puerto Rico.
  • Territory of Samoa.
  • Territory of Virgin Islands.
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Long-term care insurance premiums, federal deduction

ORS 316.680 (2)(h)

[Addition code 104]

You may have an Oregon addition for long-term care insurance premiums if you answer yes to both of these questions: 

If you answered yes to both questions, use the following formula to figure the Oregon addition:

Total long-term care premiums included in federal itemized deductions
___________________________
x Federal medical deductions allowed (Federal Schedule A, line 4) = Oregon addition
Total medical itemized deductions (Federal Schedule A, line 1)

If you answered no to either or both questions, you do not have an Oregon addition.

Example 1: Ciara, age 43, paid long-term care insurance premiums of $1,350 during the tax year. On her federal return she is limited to a $660 medical deduction for the premiums. She has other medical expenses of $4,120. Her total medical expenses on Schedule A are $4,780. Ciara has federal adjusted gross income (AGI) of $38,000. She must reduce her medical expenses by the 10 percent AGI limitation ($3,800). Her allowed medical deduction is $980 ($4,780 - 3,800). She computes her Oregon addition as follows:

$660
_____
x $980 = $135
4,780

Ciara must add back $135 on her Oregon return before she claims the Oregon long-term care insurance premiums credit.

 

Example 2: Frances, age 66 and single, paid long-term care insurance premiums of $2,800 during the tax year. On her federal return she may claim all of these premiums for her medical deduction. She has other medical expenses of $3,200. Her total medical expenses are $6,000. Frances has AGI of $39,000. She must reduce the expenses by the 7.5 percent AGI limitation ($2,925). Her allowed medical deduction is $3,075 ($6,000 - 2,925). She computes her Oregon addition to Oregon income as follows:

$2,800
_____
x $3,075 = $1,435
6,000

Frances must add back $1,435 on her Oregon return before she claims the Oregon long-term care insurance premiums credit.

Because Frances is over age 62 and is itemizing her deductions, she is eligible for the special Oregon medical deduction. This is in addition to the Oregon long-term care insurance premiums credit. For more information see the Special Oregon medical subtraction.

Exception to the addition

If you use the standard deduction on your federal return and claim itemized deductions for Oregon only, you will not have an Oregon addition for your long-term care insurance premiums.

Example 3: Danica, age 57 and single, used the standard deduction on her federal return. Danica's total itemized deductions are $4,100. Her long-term care insurance premiums are $1,000 of her $4,100 total itemized deductions. Because the federal standard deduction is more than her itemized deductions of $4,100, it benefits Danica to use the federal standard deduction. Danica filed an "Oregon-only" Schedule A with her Oregon return. She benefits more from her net Oregon itemized deductions of $3,800 ($4,100 - $300 Oregon state income tax) than she would from her Oregon standard deduction of $2,025. Because Danica had no federal benefit from her long-term care premiums, she will not have an Oregon addition for her premiums.

Business expense deduction

Did you claim a deduction for premiums paid for your employees on federal Schedule C, on your business tax return, or as an adjustment to income on Form 1040, line 29? If so, you will have an Oregon addition for the amount of premiums you deducted before you can claim the Oregon long-term care insurance premiums credit.

Part-year residents and Nonresidents

See our instructions on how to claim your addition as an "other deduction and modification."

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Lump-sum distributions

ORS 316.737

[Addition code 115]

Did you complete federal Form 4972 to figure the tax on your qualified lump-sum distribution using the 20 percent capital gain election and/or the 10-year tax option? If so, part or all of your lump-sum distribution was not included in your federal adjusted gross income (AGI). The excluded portion of your distribution must be included as an addition to your Oregon income.

Election to use 20 percent capital gain on federal Form 4972. Did you average the ordinary portion of your lump-sum distribution on federal Form 4972? Did you choose the 20 percent capital gain election on Form 4972? If you chose either of these options you will add to Oregon income the total amount of taxable income shown on your federal Form 1099-R.

The following examples show how to report your lump-sum distribution for Oregon purposes:

Example 1: Gary got a $20,000 lump-sum distribution from his employer. Of this, $12,000 was capital gain income, and $8,000 was ordinary income. Using IRS Form 4972, he chose to use the 10-year averaging method only on the $8,000 of ordinary income. He chose the 20 percent capital gain election on the $12,000 capital gain income. Gary will add all of his $20,000 lump-sum distribution to his Oregon income as an other addition on his Oregon tax return.

Election to treat the entire distribution as ordinary income and average it. Did you average all of your lump-sum distribution (ordinary income and capital gain portions) on federal Form 4972? If so, you will have an addition for the entire lump-sum distribution on your Oregon return.

Example 2: John received a $40,000 lump-sum distribution from his employer; $30,000 was capital gain income and $10,000 was ordinary income. He chose to average the entire distribution of $40,000 as ordinary income on his federal Form 4972. John will add all of his $40,000 lump-sum distribution to his Oregon income as an other addition on his Oregon tax return.

Election not to average any of your lump-sum distribution. Did you choose not to average any of your lump-sum distribution? If you included it in federal AGI, there is no addition on your Oregon return.

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Oregon 529 College Savings Network

ORS 316.680(2)(j)

[Addition code 117]

Did you withdraw funds from an Oregon 529 College Savings Network plan for nonqualified purposes? If so, you will have an "other addition" on your Oregon return for the amount you withdrew. Internal Revenue Code Section 529(e) defines qualified higher education expenses. For more information and for examples of qualified withdrawals, see Oregon 529 plans.

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Oregon Cultural Trust contributions

ORS 315.675

[Addition code 104]

If you claimed a deduction on your Schedule A for your contribution to the Oregon Cultural Trust, you will have an Oregon addition for the amount you deducted. You will not add back the contribution you made to the other Oregon nonprofit cultural organization(s).

Example: Emma contributed $500 to the Oregon nonprofit cultural organization of her choice. She made a $500 matching donation to the Oregon Cultural Trust. On her Oregon return, Emma will claim a $500 credit for her matching donation to the Oregon Cultural Trust. If she claims both contributions ($1,000) as an itemized deduction on her Schedule A, she must add back the $500 contribution made to the Oregon Cultural Trust to her income as an Oregon "other addition."

See Oregon Cultural Trust contributions for more information.

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Oregon Production Investment Fund (auction)

ORS 315.514

[Addition code 104]

If you claimed a deduction on Schedule A for the amount you paid for your Oregon Production Investment Fund tax credit, you will have an Oregon addition for the amount of your deduction.

Example: Beth bid on $2,000 worth of Oregon Production Investment Fund credits during the 2013 auction. She won all the credits she bid on and paid $1,900 for them. On her Oregon return Beth will claim an Oregon Production Investment Fund credit of $2,000. If she claims the $1,900 she paid for the credits as an itemized deduction on her Schedule A, she must add back that amount to her income as an Oregon "other addition."

For more information, see the Oregon Production Investment Fund tax credit.

Part-year residents and Nonresidents

See Deductions and Modifications for instructions on how to claim your addition as an "other deduction and modification."

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Renewable Energy Development contributions (auction)

ORS 315.326

[Addition code 104]

If you claimed a deduction on Schedule A for the amount you paid for your Oregon Renewable Energy Development tax credit, you will have an Oregon addition for the amount of your deduction.

Example: Christina bid on $5,000 worth of Oregon Renewable Energy Development credits during the 2013 auction. She won all the credits she bid on and paid $4,750 for them. On her Oregon return Christina will claim an Oregon Renewable Energy Development credit of $5,000. If she claims the $4,750 she paid for the credits as an itemized deduction on her Schedule A, she must add back that amount to her income as an Oregon "other addition."

See the Renewable Energy Development tax credit for more information.

Part-year residents and Nonresidents

See Deductions and Modifications for instructions on how to claim your addition as an "other deduction and modification."

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Self-employed health insurance deduction

ORS 316.680(2)(h)

[Addition code 104]

Did you claim a deduction for long-term care insurance premiums on federal Form 1040, line 29, as part of your self-employed health insurance deduction? If so, before you can claim the long-term care insurance premiums credit, you will have an Oregon addition for the amount you deducted on Form 1040, line 29. See the long-term care insurance premiums section for more information.

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Unused business credits

ORS 316.680(2)(f)

[Addition code 122]

Did you claim a deduction on your federal return for unused business credits (UBC)? Oregon does not allow this deduction.

Full-year residents. You must report your federal UBC deduction as an Oregon addition.

Part-year residents. You will have an Oregon addition for your federal UBC deduction related to any UBC earned while you were an Oregon resident. You also must include any federal UBC deduction related to Oregon credits earned while you were a nonresident.

Nonresidents. You will have an Oregon addition for your federal UBC deduction related to Oregon credits earned while you were a nonresident.

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University Venture Development Fund contribution

ORS 315.521

[Addition code 104]

If you claimed a deduction on Schedule A for the amount of your University Venture Development Fund contribution, you will have an Oregon addition for the amount of your deduction.

Example: Amelia made a contribution to a University Venture Development Fund in the amount of $100,000. On her Oregon return she will claim a credit of $20,000 for her contribution (she is limited to 20 percent of her contribution, or her tax liability, in any given year). If Amelia claims the $100,000 contribution as an itemized deduction on her Schedule A, she must add back that amount ($100,000) to her income as an Oregon "other addition."

See the University Venture Development Fund tax credit for more information.

Part-year residents and Nonresidents

See Deductions and Modifications for instructions on how to claim your addition as an "other deduction and modification."

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