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Agricultural workforce housing ORS 315.164

[Credit code 712]

Who can claim the credit?
You may be eligible for a credit if you construct or rehabilitate agricultural workforce housing for seasonal or year-round agricultural workers and their immediate families in Oregon. The housing must be occupied at some time during the year by a agricultural worker to qualify for the credit. Housing cannot be used for any purpose except housing for agricultural workers. Your family members are not considered agricultural workers under this credit. The credit is available for projects that physically began on or after January 1, 1990. The project must be completed before you can claim the credit.

S corporations and partnerships. The individual shareholders must claim the tax credit based on their percentage of S corporation ownership interest.
In partnership, the individual partners must claim the tax credit based on their distributive share of partnership income.

Part-year residents and nonresidents. The credit is available to nonresidents and part-year residents who build or restore agricultural workforce housing located in Oregon. You must multiply the allowable credit by the Oregon percentage on Form 40N or 40P.

How much is the credit? The total credit is 50 percent of the eligible costs actually paid or incurred to complete the agricultural workforce housing project. The credit may be taken in any of the ten consecutive tax years beginning with the tax year the agricultural workforce housing project is completed. However, the amount of credit allowed in any one tax year cannot exceed the lesser of:
  • 20% of the total credit; or
  • Your Oregon tax liability.
Construction and rehabilitation costs include those for financing, construction, excavation, installation, and permits. Construction costs also include acquisition of new or used prefabricated or  manufactured housing. However, rehabilitation costs do not include the costs of acquiring a building or an interest in a building. In either type of project, construction or rehabilitation, acquisition costs of land and existing improvements on that land used for the project are not eligible costs.

Depreciation and basis. Depreciation and amortization expenses associated with the agricultural workforce housing project are not decreased by the amount of the tax credit. Your adjusted basis in the housing project is not decreased by the tax credit.

How to claim the credit Oregon Housing and Community Services (OHCS) must inspect the agricultural workforce housing project prior to occupancy. For an application, call OHCS in Salem at 503-986-2008 or visit their website at www.ohcs.oregon.gov.

If your project qualifies, you’ll get a tax credit approval letter. Keep the letter with your tax records. If you build the housing for resale to a agricultural workforce housing project operator, no inspection or approval is necessary. You still may claim the credit.

Carryforward. The credit cannot be more than your tax liability. You can carry forward any unused credits over the next nine years. Any credit unused within nine years is lost.

Example: Ann completes an agricultural workforce housing project in tax year 2XX1 with eligible costs of $1,500,000. She receives a tax credit approval letter certifying a credit of $750,000 ($1,500,000 x .50). Ann may choose to claim her credit in any of the 10 consecutive tax years beginning with tax year 2XX1. Because Ann’s tax liability is relatively small for tax years 2XX1 and 2XX2, she chooses to claim her credit in tax year 2XX3. Ann is limited to the smaller of her tax liability or $150,000 (0.20 x 750,000) of her credit in any given tax year. Here are Ann’s tax liabilities for the next 12 years, her allowed credit amounts, and her carryforward to each following year:

2013 agricultural housing credit table

Even though Ann has $50,000 of her total credit left over after tax year 2X12, she cannot carry that amount forward to any other tax years. She may only carry forward the credit to the nine years immediately following the tax year she claims the credit.
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Alternative Fuel Vehicle Fund (auction) ORS 316 Oregon Laws 2013

[Credit code 753]

You may be able to claim a tax credit if you participated in the Alternative Fuel Vehicle tax credit
auction conducted by the Department of Revenue, in cooperation with the Oregon Department of Energy. Proceeds from the auction go to a fund from which the Department of Energy will create a loan program for public bodies and tribes to assist in the purchase of new alternative fuel vehicles. Total credits certified by the Oregon Department of Energy each fiscal year are limited to $1.5 million.

If you received a tax credit through the auction, your credit amount is shown on your certificate issued by the Oregon Department of Energy. Claim the credit on the “other credits” line on your Oregon return.

If you claim any amount you paid for this credit as a deduction on your federal return, you must add back that amount to your Oregon income. You’ll have an “other addition” on your Oregon return. For more information see the Alternative Fuel Vehicle Fund addition.

Part-year residents and Nonresidents. You can claim the full amount of the credit you received in the auction, limited by your tax liability as explained below.

Carryforward. The credit cannot be more than your
tax liability. You can carry forward any unused credits over the next three years. If you don’t use the carryforward within three years, it is lost. This credit cannot be transferred or sold.

Auction information. Visit our website for information on upcoming auctions and auction rules and procedures.
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Biomass production/collection ORS 315.141, 315.144

[Credit code 743]

If you produce or collect biomass to be used in Oregon as biofuel, you may be eligible for a tax credit on your Oregon income tax return.


Who qualifies?If you are an agricultural producer or collector of biomass that is used in Oregon as biofuel or to produce biofuel, you can claim a credit up to the amount of your tax liability.

How to claim the creditThis credit is certified by the Oregon Department of Energy. You can find out more information, read administrative rules, and download an application form at www.oregon.gov/energy/renew/biomass, then on the right navigation bar click on “Biomass Producer & Collector Tax Credits.”

Carryforward. Any credit that exceeds your tax liability can be carried forward for four years. If you don’t use the carry forward within four years, it is lost. The credit is not refundable.

Part-year residents and nonresidents. You must prorate your credit by your Oregon percentage.

Credit transfers. You may transfer your credit to another taxpayer for consideration. You and the
transferee must jointly file a notice of tax credit transfer with the department. Go to our website to download Transfer Notice for Certain Credits or contact us. Both parties must complete and sign the notice. 

Include the transfer notice with the tax return of the transferee claiming the credit.

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Business energy ORS 315.354, 315.357

[Credit code 703]

2012 was the last year this credit was being certified. In order to claim this credit for your qualifying project you must have:

  • Filed a preliminary certification application with the Oregon Department of Energy (ODOE) on or before April 15, 2011;
  • Received preliminary certification from the ODOE before July 1, 2011; and
  • Received final certification from the ODOE before January 1, 2013, or demonstrated evidence of beginning construction before April 15, 2011.

Any Oregon business with investments in energy conservation, recycling, renewable energy resources, or less-polluting transportation fuels may qualify for this tax credit.

How much is the credit?The tax credit is 35 percent of the eligible project costs. You take the credit over five years: 10 percent in the first and second years and 5 percent each year thereafter.
Those with eligible project costs of $20,000 or less may take the tax credit in one year. But the credit is not refundable and cannot exceed your tax liability. Certain facilities using or producing renewable
energy resources are allowed a tax credit of 50 percent of eligible project costs. This credit is claimed at 10 percent each year for five years.
A special credit is allowed to homebuilders for installing renewable energy systems and building highperformance homes. These credit amounts are up to $9,000 and $12,000, respectively. Do not adjust your Oregon basis for the amount of any credits claimed.

New applications are no longer being accepted. For more information, contact the Oregon Department of Energy at 1-800-221-8035 (toll-free from an Oregon prefix), in Salem at 503-378-4040, or go to www.oregon.gov/energy.


How to claim the creditApply for a final tax credit certificate when your project is finished. Department of Energy staff will review your actual expenses and, when approved, will send you the final certificate. Keep a copy of the final certification with your Oregon tax records.


Carryforward. Your credit cannot be more than your tax liability. You can carry forward any unused credit over the next eight years. If you don’t use the carry forward within eight years, it is lost.


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Child and dependent care ORS 316.078

[Form 40N only: Credit code 745] [Carryforward credit code 704]


Who can claim the credit? You're allowed an Oregon credit only if you qualify for the federal child and dependent care credit. You may still be able to claim the Oregon credit even if you can't use all your federal credit. In most cases, you can't claim the credit if you're married/RDP filing separately.
How much is the credit?
Use the following worksheet:


1. Enter the amount from federal Form 2441, line 6.* 1.                
2. Enter the decimal amount from the following table. 2.                

If your federal taxable income from Form 1040, line 43; or Form 1040A, line 27 is: Your decimal amount is:
Over But not over
- - $5,000 .30
$5,000 10,000 .15
10,000 15,000 .08
15,000 25,000 .06
25,000 35,000 .05
35,000 45,000 .04
45,000 - - .00


3. Multiply the amount on line 1 by the decimal amount on line 2.

Form 40 filers: If you paid prior year child care expenses in 2013, continue to line 4. Otherwise, stop here. This is your credit.

Form 40P and 40N filers: If you paid prior year child care expenses in 2013, continue to line 4. Otherwise, continue to line 8. Your credit is limited.
3.                


Did you pay 2012 child care expenses in 2013? If so, you may be able to use that amount to increase your 2013 Oregon child and dependent care credit. If you entered CPYE on the dotted line next to line 9 of federal Form 2441, then continue to line 4 to figure your credit.

​4. Enter the amount of your prior year child and dependent care expenses included in the computation of your federal credit. ​4.                ​
​5. Enter the decimal amount that applies to your prior year federal taxable income. ​5. ​               
​6. Multiply line 4 by line 5. ​6.                ​
​7. Add the amounts on line 3 and 6. This is your credit. ​7. ​               
​ ​If you file Form 40N or 40P, you must complete line 8 below.
​8. Multiply the greater of line 3 or 7 by your Oregon percentage. This is your credit. 8.                ​
 

*Do not enter more than $3,000 for one qualifying dependent or $6,000 for two or more qualifying dependents.



Carryforward. Your credit cannot be more than your tax liability for Oregon. You can carry forward any unused credit over the next five years. If you don't use the carry forward within five years, it is lost. Use credit code 704 when claiming a carryforward of your prior year child and dependent care credit.

Example: Mr. and Mrs. Taylor are married filing a joint return. They have one three-year-old dependent daughter who is in day care while they work. The Taylors had federal taxable income of $44,100 and $3,900 of child care expenses in 2013. They do not have any prior-year child care expenses included in their 2013 federal expenses. Here’s how the Taylors determine their child and dependent care credit:

​1. Enter the amount from federal Form 2441, line 6. ​1. ​$ 3,000
​2. Enter the decimal amount from the following table. ​2. .04

If your federal taxable income from Form 1040, line 43; or Form 1040A, line 27 is:

Your decimal amount is:

Over -

But not over -


- -

$5,000

.30

$5,000

10,000

.15

10,000

15,000

.08

15,000

25,000

.06

25,000

35,000

.05

35,000

45,000

.04

45,000

- -

.00

​3. Multiply the amount on line 1 by the decimal amount on line 2.
If you paid all your 2012 expenses in 2012, stop here. This is your credit
​3. $120
​4. Enter the amount of your prior year child and dependent care expenses included in the computation of your federal credit. ​4. n/a
​5. Enter the decimal amount that applies to your prior year federal taxable income. ​5.
​6. Multiply line 4 by line 5. ​6.
​7. Add the amounts on line 3 and 6. This is your credit. ​7. $120
 
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Child Care Fund contribution ORS 315.213

[Credit code 705]

Contributions to the Child Care Fund qualify for a credit on your Oregon income tax return. Your credit
is equal to 75 percent of the dollar amount donated. Your donation will help address child care affordability, provider compensation, and quality assurance issues in Oregon. For details on the program, go to the Oregon Department of Education, Early Learning Council, Office of Child Care, www.oregon.gov/employ/ccd.


How to claim the creditThe Office of Child Care will compute your allowable tax credit and give you a certificate. Keep this certificate with your permanent tax records.

Enter your credit on the “other credits” line on your tax return along with the credit’s numeric code.

If you claim your Child Care Fund contribution as an itemized deduction on your Schedule A, you must add back that amount to income. See Child Care Fund contributions for additional information.

Part-year residents and nonresidents. You can claim the credit allowed a full-year resident.

Carryforward. Your credit may not be more than your tax liability for Oregon. You can carry forward any unused credit over the next four years. If you don’t use the carry forward within four years, it is lost.


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Claim of right income repayment

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 credit on your
federal return, follow the instructions on Worksheet CR (Form number 150- 01-168) to calculate your Oregon credit. Include the credit on the estimated payment line of your Oregon return, and check the claim of right box.

If you claimed a federal deduction for the repayment, you have a choice for Oregon. The deduction can flow through to your Oregon return, or, if it results in less tax, you can claim the Oregon credit instead. If you let the federal deduction flow through, you don’t need to do anything further on your Oregon return. You must add back any federal deduction to claim the credit on your Oregon return. See the instructions on Worksheet CR (Form number 150-101-168) if you’re not sure which is best. Or read more about the claim of right. Back to Top

Crop donation ORS 315.156

[Credit code 708]

2011 was the last year this credit could be claimed. However, you can carry forward any unused credit for three years. The credit cannot be more than your tax liability for Oregon. If you don’t use the carryforward within three years, it is lost.

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Diesel engine replacement

Temporary provisions relating to low emission truck engines following ORS 315.356

[Credit code 734]

This credit expired July 1, 2011. However, you can carry forward any unused certified credit for four years. The credit cannot be more than your tax liability for Oregon. If you don't use the carryforward within four years, it is lost.

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Diesel engine repower or retrofit

Temporary provisions relating to diesel engines, following ORS 315.356

[Credit code 734]

2011 was the last year this credit could be claimed. However, you can carry forward any unused credit for three years. The credit cannot be more than your tax liability for Oregon. If you don't use the carryforward within three years, it is lost.

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Earned income ORS 315.266


You’re allowed an Oregon earned income credit (EIC) only if you qualify for the earned income credit on your federal return. Your Oregon EIC is refundable. If the credit is more than your Oregon tax liability, the difference will be refunded to you.


Full year residents. Your Oregon EIC is 6 percent of your federal EIC.

Part-year residents and nonresidents. Your Oregon EIC is 6 percent of your federal EIC, multiplied by your Oregon percentage.


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Elderly or disabled ORS 316.087

[Credit code 709]

Oregon allows a credit for the elderly or disabled if you qualify for the federal elderly or disabled credit, refer to federal Form 1040, Schedule R.

You can claim this credit or the retirement income credit, but not both in the same year.

Full-year residents. Your Oregon credit is 40 percent of your federal credit.

Part-year residents and nonresidents. Your credit is 40 percent of your federal credit, multiplied by your Oregon percentage.

No carryforward. Your credit cannot be more than your tax liability for Oregon. Any credit not used this year is lost.

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Electronic commerce zone investment ORS 315.507

[Credit code 710]

This credit is available to individuals and businesses that engage in electronic commerce in an Oregon enterprise zone or city designated for electronic commerce. Go to Business Oregon's website for complete information.

What costs qualify?

The credit is for costs of capital assets related to electronic commerce sales, customer service, order fulfillment, or broadband infrastructure.

How to apply for the tax credit

You may download the authorization application and exemption claim forms from our website.

How much is the credit?

The credit is equal to 25 percent of the investments made during the tax year. The maximum credit allowed in any tax year is $2 million.

Part-year residents and nonresidents. Multiply your credit by your Oregon percentage.

Carryforward. Your credit cannot be more than your tax liability for Oregon. You may carry forward any unused credit over the next five years. If you don't use the carry forward within five years, it is lost.

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Employer-provided dependent care assistance ORS 315.204

[Credit code 707]

Employers may claim a credit for providing dependent care assistance to their employees. There are two credits available:

  • Information and referral services credit.
  • Assistance credit.

Information and referral services-ORS 315.204(4)

This credit is for employers who provide dependent care information and referral services. The services must be used to help their employees find dependent care.

The credit is 50 percent of the amount paid by the employer to provide these services.

Assistance-ORS 315.204(1)

This credit is for employers who pay for the care of their employees' dependents.

The person receiving the dependent care must be an employee's:

  • Dependent, under the age of 13, or
  • Dependent, physically or mentally incapable of self-care, or
  • Spouse, physically or mentally incapable of self-care.

The credit is the smaller of:

  • 50 percent of the qualifying expenses paid by the employer, or
  • $2,500 per employee who receives the assistance.

The employer must have a written dependent care assistance plan. Taxpayers must apply to the Office of Child Care, in the Early Learning Council of the Department of Education and receive certification. Only amounts paid for dependent care provided in Oregon are eligible for the credit. The dependent care provider cannot be the employee’s spouse, a dependent, or a child (under age 19).

The business deductions claimed on the employer’s tax return must be reduced by the amount of the
credit claimed. 

Employees. Did your employer make dependent care payments for you? If so, you cannot use the amount of your employer’s payments to claim a child and dependent care credit on your income tax return. 

Did the dependent care payments exceed the income of either you or your spouse? If so, you must add the excess payment to your gross income.

Employers. For general information on how to select a dependent care option, contact the Office of Child Care in Salem at 503-947-1400 or toll-free from an Oregon prefix at 1-800-556-6616.


How to claim any of the two dependent care assistance credits
To claim either the information and referral services credit or the assistance credit, you must complete the Dependent Care Credits for Employers form. Download the form, or call us to order. Complete the part of the form that applies to the credit you’re claiming. Keep the completed form with your income tax records.

Partnerships or S corporations. Partners or shareholders can claim a portion of the partnership or S corporation credit based on their percentages of ownership interest.

Part-year residents. Information and referral services credit and assistance credit. You must multiply your allowable Oregon credit by your Oregon percentage on Form 40P.

Nonresidents. Information and referral services credit and assistance credit. You may claim the credit allowed a full-year resident.

Carryforward. The total of your dependent care assistance credits may not be more than your Oregon tax liability. You may carry forward any unused credit for five years. If you don’t use the carryforward within five years, it is lost.

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Employer scholarship ORS 315.237

[Credit code 711]

A tax credit is allowed to Oregon employers who have scholarship programs for their employees and their employees’ dependents. To receive the credit, you must be certified by the Oregon Student Assistance Commission and apply to participate in the Tax Credit Program. Keep the certificate with your tax records. For an application and more information, contact the commission in Eugene at 541-687-7400 or toll-free from an Oregon prefix at 1-800-452-8807, ext. 7400, or go to their website at www.oregonstudentaid.gov.

How much is the credit?
The credit is the smaller of:

  • 50 percent of the amount of qualified scholarship funds actually paid to or on behalf of qualified scholarship recipients during the tax year; or
  • $50,000.

Part-year residents and nonresidents. Multiply your credit by your Oregon percentage.

Carryforward. Your credit cannot be more than your Oregon tax liability. You can carry forward any unused credit over the next five years. If you don’t use the carry forward within five years, it is lost.

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Energy conservation project credit ORS 315.331

[Credit code 750]

A tax credit is allowed for energy conservation projects certified by the Department of Energy.

What Qualifies?The project must be located in Oregon and the final certification must be received from the Oregon Department of Energy.

How much is the credit? The credit is 35 percent of the certified cost of the project. You must take the credit over five years: 10
percent in the first and second years and 5 percent in each of the three years thereafter. Those with certified costs of $20,000 or less may take the entire tax credit in the first year.

How to apply for the creditFor an application, fee information, and assistance with the application process, contact the Oregon
Department of Energy at 1-800-221-8035 (toll-free from an Oregon prefix), in Salem at 503-378-4040, or go to www.oregon.gov/energy.

How to claim the credit Apply for a final tax credit certificate when your project is finished. Department of Energy staff will
review your actual expenses and, when approved, will send you the final certificate. Keep a copy of the final certification with your Oregon tax records.

Carryforward
Your credit cannot be more than your tax liability. You can carry forward any unused credit over the
next five years. If you don’t use the carry forward within five years, it is lost.

Credit transfers
The owner of a project may transfer the credit in exchange for a cash payment equal to the present day value of the tax credit, as established by the Department of Energy. The credit may only be transferred to another personal income taxpayer, a C corporation, or an S corporation. Transfer to a partnership is not allowed. The credit may only be transferred once.

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Exemption ORS 316.085

This year’s maximum credit is $188 for each qualifying exemption. The exemption amount is indexed for inflation.

An exemption credit* is not allowed if your federal adjusted gross income on line 8 of Form 40, or line
38(F) of Form 40N, or Form 40P exceeds:

  • $200,000 for married/RDP filing jointly, head of household, or qualifying widow(er) filers; or
  • $100,000 for married/RDP filing separately or single filers.

*Includes your, your spouse’s, and dependent exemptions. The exemption for severely disabled and child(ren) with a disability are not subject to the adjusted gross income limitation.

Part-year residents and nonresidents. Multiply your exemption credit by your Oregon percentage.

You and your spouse/RDP 

You are allowed one exemption credit for yourself and one for your spouse/RDP if you are filing a joint return. If someone else can claim you as a dependent, you cannot claim an exemption for yourself. If someone else can claim your spouse/RDP as a dependent, you cannot claim their exemption. This is true even if the other person does not claim you (or your spouse/RDP) as a dependent.

If your spouse/RDP qualifies as your dependent and you are filing using the status married/RDP filing
separately, include your spouse/RDP on the “All dependents” line, line 6c, not on the spouse/RDP
line, line 6b.


Severely disabled—ORS 316.752Did you have a severe disability at the end of the tax year? If so, you can claim an additional exemption credit. You may qualify for the severely disabled exemption even if someone else can claim you as a dependent. You’re considered to have a severe disability if any of the following apply:

  • You permanently lost the use of one or both feet or legs, or
  • You permanently lost the use of both hands, or
  • You’re permanently blind, or
  • You have a permanent condition or an impairment of indefinite duration that limits your ability to: 
    • Earn a living, or
    • Maintain a household, or
    • Transport yourself.

Deafness or hearing impairment alone do not qualify as a severe disability for purposes of this program. This is true regardless of any special equipment you may use in your home or workplace.

You do not qualify for this exemption if:

  • You have a temporary disability from an injury or illness and are expected to recover, or
  • Your condition keeps you from doing your former work but not from doing other kinds of work without special equipment.

If you have a permanent severe disability, your physician must write a letter describing it. Keep the letter with your permanent health records.

If you qualify, check the “severely disabled” exemption box on your return. If your spouse qualifies, he or she may also claim this exemption. You and your spouse may also qualify for the credit for the loss of use of limbs. See loss of use of limbs.

All dependentsYou are allowed one exemption credit for:

  • Each child you qualify to claim as a dependent, and
  • Each of your other dependents you qualify to claim on your federal return.

On your Oregon return, identify all dependents by first names.

Example: Susan gives up her exemption for her son on her federal income tax return so he can claim the federal Hope credit on his tax return. Because Susan did not claim her son as a dependent on her federal income tax return, she may not claim him as a dependent on her Oregon income tax return.

In most cases, you must claim the same dependents for Oregon as you claimed on your federal return. 

Child(ren) with a disability—ORS 316.099 

You may be entitled to an additional exemption credit for your dependent child who has a qualifying disability. To qualify, all of the following must be true. Your child:
  • Qualified as your dependent for 2013, and 
  • Was eligible for “early intervention services” or received special education as defined by the Department of Education, and
  • Was considered to have a disability as of December 31, 2013, under the federal Individuals with Disabilities Education Act.

For purposes of special education:

  • Learning disabilities and communication disorders do not qualify.
  • Eligible disabilities and their Oregon Department of Education code numbers include:
    • Autism (82).
    • Deaf-blind (43).
    • Hearing impairment (20).
    • Mental retardation (10).
    • Orthopedic impairment (70).
    • Other health impairment (80).
    • Serious emotional disturbance (60).
    • Traumatic brain injury (74).
    • Visual impairment (40).

Get a current statement of eligibility and the cover sheet that confirms one of the disabilities listed above from one of the following:

  • The child’s Individualized Education Program (IEP), or 
  • The child’s Individualized Family Service Plan (IFSP).

Keep the statement and cover sheet with your permanent health records. Write your child’s name on line 6d of your Oregon return, “disabled children only.” Also be sure to include the child’s name on line 6c for “all dependents.”

No carryover. Your credit cannot be more than your tax liability for Oregon. Any credit not used this year is lost.


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Fish screening devices ORS 315.138

[Credit code 714]

A tax credit is available to taxpayers who pay to install fish screening devices required by the Oregon
Department of Fish and Wildlife (ODFW).

Who can claim the credit?The credit is available to individuals, partners, sole proprietorships, and S corporation shareholders.
Shareholders and partners can claim the credit based on their pro rata share of the certified costs.

How much is the credit? The credit is equal to the smaller of (a) 50 percent of the net costs of installing the device, or (b) $5,000. You can still claim any depreciation or amortization otherwise allowed. Do not reduce your basis in the property by the credit amount.

Part-year residents and nonresidents. Multiply the credit allowed a full-year resident by your Oregon percentage.

How to claim the credit ODFW will send you a preliminary certificate within 90 days of the receipt of plans, specifications, and
other information it requests from you. After you complete the project, ODFW will send you a final
certificate that includes the verified costs of the installation. Contact ODFW in Salem at 503-947-6000
or toll-free from an Oregon prefix at 1-800-720-6339, or go to www.dfw.state.or.us.

Keep the final ODFW certificate with your tax records. Also keep a statement showing the computation of the allowed credit, if this is not on the certificate.

Carryforward. The credit for the year cannot be more than your tax liability for Oregon. You can carry forward any unused credit over the next five years. If you don’t use the carry forward within five years, it is lost.

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Income taxes paid to another state ORS 316.082, 316.131

[Addition Code 104]

If you pay tax to Oregon and another state on the same item(s) of income, you have “mutually taxed income.” You may be able to claim a credit on your Oregon return for income taxes paid to another state.

Only take a credit for tax paid to another state if Oregon taxed the income and the other state also
had a right to tax the income. For instance, if you live in Oregon, other states cannot tax your pension
income. Only the state you live in can tax your pension income. If you pay tax to another state on your pension income, you cannot take a credit for that tax. You can’t take a credit for paying tax you don’t owe.

If you take an Oregon credit and a federal deduction for the same tax, add the amount deducted back to your income. Add it back in the year you deduct it.

Are you a full-year Oregon resident? Do you have income taxed by Oregon and one or more of these
states: Arizona, California, Indiana, or Virginia? If so, do not claim the credit on your Oregon return. (See Exception for Oregon resident partners and S corporation shareholders below) You must claim the credit on the nonresident return you file with the other state. See the instructions on the other state’s tax form to figure your credit.

This credit is only for state income tax. You cannot claim the credit for any city tax, county tax, school
tax, sales tax, alternative minimum tax (AMT), property tax, or other states’ taxes not based on income. For example, the Idaho Permanent Building Fund Tax and the Washington Business and Occupation Tax do not qualify.

When can this credit be claimed?You can claim this credit only if you have paid the other state’s tax before or at the same time as you file your Oregon return. If you pay tax to another state for a prior tax year, you must amend your Oregon return for that year to claim the credit.

If Oregon and another state tax you on the same income, but in different tax years, Oregon will allow a credit for the year the tax is paid to Oregon. Go to our website if you need more information or for administrative rule OAR 150-316.082(6).

If you have a gain from the sale of your home and you pay tax to Oregon and another state or country on that sale, you can claim either the credit for taxes paid to another state or the credit for mutually taxed gain on the sale of residential property. You cannot claim both credits. See Mutually taxed gain on the sale of residential property.

How much is the credit?Your credit is the smallest of:

  • Your Oregon tax after all other credits, or
  • The tax you actually paid to the other state, or
  • The amount figured using Formula I, below, or
  • The amount figured using Formula II, below, (for nonresidents and part-year residents for the part of the year you were a nonresident of Oregon only).

DefinitionsModified adjusted gross income

Full-year residents. Your modified adjusted gross income is your federal adjusted gross income (AGI) modified by Oregon additions and subtractions.

Part-year residents and nonresidents. Your modified adjusted gross income is the part of your federal AGI that is taxable to Oregon, modified by Oregon additions and subtractions.

“Oregon additions” are generally items of income that Oregon taxes but the federal government does not. “Oregon subtractions” are generally items of income the federal government taxes but Oregon does not. For example, U.S. bond interest is an Oregon subtraction because it is income Oregon does not tax. Do not subtract your federal tax; it is not an income item.


Formula I

Modified AGI taxed by both states Modified AGI x Your Oregon tax after all other credits
Formula II

Modified AGI taxed by both states Total income on the other state's return x Other state's tax after all other credits


Who can claim this credit?Full-year residents. You may claim a credit if you pay income tax to both Oregon and another state. The tax must be on the same income. The credit for a full-year resident is the smallest of your Oregon tax after all other credits, the tax actually paid to the other state, or the amount figured with Formula I. Note: Full-year residents do not use Formula II.

Example 1: Nancy has adjusted gross income of $44,000. This includes $10,000 of rental income taxed by both Oregon and Idaho and $5,000 of U.S. bond interest. She received $1,000 interest from municipal bonds from another state. She has a federal tax liability of $3,000. Her Idaho income tax is $300. Her net Oregon tax is $2,000 (before her credit for income taxes paid to another state). Here’s how she figures her credit:

Federal adjusted gross income $ 44,000
Modifications
Add municipal bond interest
+ 1,000
$ 45,000
Less U.S. bond interest
- (5,000)
Modified adjusted gross income
$ 40,000
 

Note that the federal tax subtraction is not used in this computation.

Formula I: ($10,000 ÷ $40,000) x $2,000 = $500.

Nancy's credit is $300, the smallest of:

  • Her Oregon tax after all other credits ($2,000), or
  • The tax actually paid to Idaho ($300), or
  • The amount from Formula I ($500).

Part-year residents. You can claim the credit for the part of the year you were a nonresident of Oregon if you pay income taxes on the same income taxed by both Oregon and one of the following—Arizona, California, Indiana, or Virginia. Your credit is the smallest of:

  • Your Oregon tax after all other credits,
  • The tax you actually paid to the other state,
  • The amount figured using Formula I, or
  • The amount figured using Formula II.

You can claim the credit for the part of the year you were a resident of Oregon if you pay Oregon tax on income also taxed by a state not listed above (or you meet the exception described in Exception for Oregon resident partners and S corporation shareholders). Follow the full-year resident instructions above.

Example 2: Ezra moved from Idaho to Oregon on September 1. He sold Idaho property on October 18. His Idaho income tax after credits is $200. His Oregon income tax liability after other credits is $400. His income on his Oregon and Idaho returns is:

Oregon income
Wages September 1 to December 31 $ 7,000
Interest September 1 to December 31 500
Sale of Idaho property October 18:
Idaho capital gain reported
+ 6,000*
Total AGI taxable to Oregon $13,500
Idaho income
Wages January 1 to August 31 $ 11,500
Interest January 1 to August 31 1,000
Sale of Idaho property October 18:
Idaho capital gain reported
6,000
Less Idaho capital gain exclusion*
($3,600)
Net capital gain taxed by Idaho
2,400
Total AGI taxable to Idaho $14,900
 * If the other state has any income exclusion that applies to the mutually taxed income, you must adjust the mutually taxed income by the exclusion amount.

In Example 2, Ezra's federal capital gain is $6,000. The mutually taxed income is only $2,400. Idaho allows Ezra to exclude 60 percent ($3,600) of his $6,000 capital gain.

Here's how Ezra figures his Oregon credit for income taxes paid to another state:

Formula I: ($2,400 ÷ $13,500) x $400 = $71

His credit is $71, the smallest of:

  • His Oregon tax after all other credits ($400), or
  • The tax actually paid to Idaho ($200), or
  • The amount from Formula I ($71).

Example 3: Use the same facts as in Example 2, except change the date Ezra sold his Idaho property to August 19.

Because Ezra sold his Idaho property before becoming an Oregon resident, he doesn't have any mutually taxed income. Ezra will not claim a credit for income tax paid to another state.

Nonresidents. You can claim a credit if you pay income taxes on the same income taxed by both Oregon and one or more of the following—Arizona, California, Indiana, or Virginia.

Your credit is the smallest of your Oregon tax after all other credits, the tax you actually paid to the other state, the amount figured using Formula I, or the amount figured using Formula II.

Example 4: Mary is a full-year resident of California. She lived in Oregon for 10 years prior to retiring to California. While living in Oregon, she acquired and maintained rental property there. She now receives installment payments from the sale of the property and pays tax to California on the gain and interest. Her California income tax after credits is $100.

Because she is an Oregon nonresident, only the gain is taxed on her Oregon nonresident return. Her Oregon tax after credits is $350. Her income is as follows:
Oregon income
Capital gain on installment sale of real property $10,000
Total AGI taxable to Oregon $10,000
California income
Capital gain on installment sale of real property $10,000
Interest on installment sale 5,000
Other interest 8,000
Business loss (20,000)
Total AGI taxable to California $3,000

Her income taxed by both states is $10,000.
  • Formula I: ($10,000 ÷ $10,000) x $350 ($350).
  • Formula II: ($10,000 ÷ $3,000) x $100 ($333).

Her Oregon credit is $100, the smallest of:

  • Her Oregon tax after all other credits ($350), or
  • The tax actually paid to California ($100), or
  • The amount from Formula I ($350), or
  • The amount from Formula II ($333).

Exception for Oregon resident partners and S corporation shareholders. Owners of companies taxed in Oregon as partnerships or S corporations may be able to claim a credit for income taxes paid to another state on their resident Oregon return. The tax must be an income tax, not a minimum tax.

To claim the credit on the resident return, the partner must have participated in a group/composite filing for the other state and the partnership must have paid the partner’s tax liability. The partner is considered to have paid a pro rata share of the other state’s income tax.

The allowable credit is the smallest of the following:

  • Oregon tax on the individual’s return, or
  • The individual’s pro rata share of the other state’s tax, or
  • The individual’s pro rata share of the mutually taxed income from an S corporation or partnership return:
    • divided by the individual’s modified Oregon income, and
    • multiplied by the Oregon tax liability from the individual return.

Example 5: Oliver is a full-year Oregon resident with modified Oregon income of $30,400 and Oregon tax (after all other credits) of $1,538. Oliver is a 10 percent shareholder of My Corp., an electing S corporation in California. California has a corporate tax of 1.5 percent of income, with a minimum corporate tax of $800.

For this tax year, My Corp. distributed $10,000 among its shareholders (Oliver’s share is $1,000). The corporation must pay California $800 of tax, and only $150 is attributable to income ($10,000 × 1.5%). Oliver’s share of this tax is $15. The balance paid by My Corp. ($650) is a minimum tax and doesn’t qualify for this credit. Oliver’s Oregon credit for income taxes paid to another state is $15, the smallest of:

  • Oregon tax after all other credit: $1,538, or
  • Pro rata share of California’s tax: $15, or
  • ($1,000 ÷ $30,400) × $1,538 = $51

An Oregon resident is allowed a credit for taxes paid to another state on mutually taxed income if the other state does not allow the credit.

Example 6: Monte, an Oregon resident, receives partnership income from Virginia sources and joins in a multiple nonresident filing with that state. If Virginia does not allow a credit for taxes paid to Oregon on the multiple nonresident tax return, then Monte can claim a credit on his Oregon resident return.

Addition for taxes also claimed as an itemized deduction 

Did you claim a credit for taxes paid to another state and claim those same taxes as an itemized deduction? If so, you will reduce your itemized deductions by the smaller of:

  • The other state’s tax liability amount for the year you claim the Oregon credit, or
  • The other state’s tax amount for the year you included it as an itemized deduction.

Include this amount on line 24 of Oregon Form 40 or line 42 of Form 40N/40P. This reduces your itemized deductions for the other state’s income tax.
If you pay tax to more than one state, compute your addition state by state. Also compute it year by year. Is the amount of tax you are deducting less than what you owe the other state? If so, make an addition on next year’s Oregon return for the tax that was paid and deducted on your federal return.

Example 7: Inga claimed a $100 credit for taxes paid to Maine on her Oregon return. She claimed a deduction of $200 for Maine taxes withheld from her wages on Schedule A. On Inga’s Maine return, her net tax liability is $150. She will reduce her itemized deductions by $150 by including that amount on line 24 of her Oregon Form 40. This is the smaller of her Maine tax liability ($150) or the amount she claimed as an itemized deduction ($200) for Maine taxes.

Example 8: Peggy lives in Oregon. She owes $300 to Iowa for 2013. Her credit for tax paid to Iowa is $200. Peggy computes her credit using Formula I. Peggy had $100 withheld from her pay for Iowa tax in 2013. She pays the other $200 when she files her 2013 Iowa return. Peggy deducts $500 for tax she pays to California.

Peggy reduces her itemized deductions by $100 by including that amount on line 24 of her Oregon Form 40. She makes no changes for the California tax. As an Oregon resident, she may not take a credit for California tax.

If Peggy itemizes again in 2014, she may deduct $200 (the additional Iowa tax paid in 2013) on her federal tax return. Peggy adds back $200 on her Oregon tax return.

Addition when credit taken by Oregon resident partners and S corporation shareholders for tax paid by partnership or S corporationIf you take a credit for tax paid to another state by a business (partnership or S corporation), add back the deduction to Oregon income this way:

Add the tax you deducted for the other state to Oregon income as an “Other addition” if:

  • the business does not deduct the tax payment on its own tax return,
  • you file a return for the other state, and
  • you deduct the tax on your return.

You will also add the tax you deducted for the other state to Oregon income as an “Other addition” if:

  • the business pays the tax,
  • the business files a composite return for you,
  • the business does not deduct the tax, and
  • you deduct the tax on your return.

Add to your Oregon income the tax that the business deducts if:

  • the business pays the tax,
  • the business deducts the tax, and
  • you take a credit on your return for it.

Use addition code 104. The deduction by the business lowered your Schedule E income.

Example 9: Susan owns 50% of Painter, Inc., an Oregon S corporation. Painter pays California income
tax. It deducts the tax on its return. 

Painter paid $2,000 of tax for Susan with its 2012 tax return filed in 2013. It paid $30,000 of 2012 tax for her in 2012 and $10,000 of 2012 tax in January 2013.

Susan figures her credit for 2012 using $42,000. She adds back $30,000 on her 2012 return with addition code 146.

Susan adds back $12,000 on her 2013 return.

Example 10: William itemizes his deductions. William owns 5% of Claflin, LLP, a limited partnership in Utah. The business files group returns for its owners.

Each year, the company sends a letter to its owners showing the amounts the owners can deduct
for income taxes and the amounts they can take as a credit. The business pays the taxes with the group returns. The letter states that William can take a $3,000 credit for Utah and that he can deduct $4,000.

William claims a credit of $3,000 on his Oregon return and deducts $4,000 on his federal Schedule A. He will add $4,000 to his Oregon income as an “Other addition.”

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Individual Development Account ORS 315.271

[Credit code 715]

For information on this credit see the Individual Development Account section on the other items page.

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Involuntary move of a mobile home ORS 316.153

[Credit code 741]

If you claimed the non-refundable credit for involuntary move of a mobile home in 2006, 2013 is the last year you may claim a carryforward. Enter the amount of your carryforward on your Oregon return as an “Other credit.” Use code 741 to identify it. If you were required to move out of a mobile home park in 2007 or later, you may qualify for the mobile home park closure credit.


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Long-term care insurance premiums ORS 315.610

[Credit code 716]

Oregon allows a tax credit for long-term care insurance premiums.

Who can claim the credit?To qualify, you must hold a policy that was issued on or after January 1, 2000, and you, your parents, or your dependents must be the beneficiaries. You may also claim the credit if you’re an employer paying for long-term care insurance for your employees.

How much is the credit?The credit is the smaller of 15 percent of the premiums paid or $500. If you and your spouse/RDP file
separate returns, you must prorate the credit, but can prorate it any way you choose. The combined credits on each person’s separate return can’t be more than the credit you would be allowed on a joint return.

For employers, the credit is the smaller of 15 percent of the premiums paid for all covered Oregon employees or $500 multiplied by the number of covered Oregon employees.

Example 1: Ian purchased a long-term care insurance policy for himself in 2000. In 2013 he paid $920 of premiums to renew his policy. Ian’s credit is $138 ($920 × 0.15 percent).

Example 2: Jena purchased a long-term care insurance policy for herself in 1997. In 2013 she paid $640 of premiums to renew the policy. Because Jena purchased her policy before 2000, she cannot claim this credit.

Example 3: Chevy purchased a long-term care insurance policy in 2013 for his elderly parents, Peter and Pansy. He paid $2,600 in premiums. His parents are the beneficiaries. Chevy also paid $500 in premiums to renew the long-term care insurance policy he purchased in 2001. He is the beneficiary. Chevy paid a combined total of $3,100 in premiums on the two policies. His credit is $465 ($3,100 x 0.15).

You must report any benefit from a federal deduction for the premiums as an Oregon addition

Part-year residents and nonresidents. Multiply the credit allowed a full-year resident by your Oregon percentage.

No carryover. Your credit cannot be more than your tax liability for Oregon. Any credit not used this year is lost.

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Loss of use of limbs ORS 316.079

[Credit code 717]

Who can claim the credit?

You're entitled to this credit if you have permanent and complete loss of the use of two or more limbs.

How much is the credit?

The credit is $50 per year for taxpayers who qualify. A $50 credit can also be claimed for your spouse/RDP if they also qualify. You cannot claim this credit for a dependent.

How to claim the credit

Get a disability certification form the first year you file for the credit. The form is available from your county public health officer, who must sign the form. Keep the form with your permanent health records.

You also qualify for an additional exemption for severely disabled persons.

No carryforward. The credit cannot be more than your tax liability for Oregon. Any credit not used this year is lost.

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Low-income caregiver (for home care of a low-income person age 60 or older) ORS 316.148

[Credit code 718]

You may be eligible for this credit if you pay expenses for the care of a person 60 or older that keeps them from being placed in a nursing home. Both of you must meet certain qualifications to be eligible for the credit.

Who can claim the credit?You can only claim the credit if your household income is less than $17,500. Household income is the total taxable and nontaxable income of a husband and wife living in the same household. See the discussion of household income under the Retirement income section.

The person receiving care must meet all of the following requirements:

  • Is at least 60 years old, and 
  • Is not in a nursing home, rehabilitation facility, or other long-term skilled care facility, and 
  • Doesn’t receive medical assistance from the state Seniors and People with Disabilities Division, and 
  • Qualified for Oregon Project Independence during the tax year. The program helps keep people from going to nursing homes unnecessarily. To qualify, they must have severe problems with communication, mobility, managing a household, nutrition, personal relationships, managing money, health, or other problems caring for oneself. The problems must be severe enough that the person might normally be placed in a nursing home, and
  • Does not receive services from Oregon Project Independence including housekeeping, homemaking, and home health care, and 
  • Has household income of $7,500 or less. The support you gave the person is considered a gift. The total gifts received by the person, minus $500, must be included in their household income.

Part-year residents and nonresidents. You can claim the full credit, subject to the requirements above.

How much is the credit?The credit is equal to the smaller of $250 or 8 percent of the qualifying expenses paid or incurred during the tax year.

What are qualifying expenses? You can claim food, clothing, medical, and transportation expenses you paid during the year. The amount you paid for lodging doesn’t qualify. Transportation expenses for medical and personal needs, such as shopping, also qualify.

You can claim only the costs paid after the person became 60 years old. Do not claim costs paid while the person received benefits from Oregon Project Independence or medical assistance from Seniors and People with Disabilities Division. Don’t claim costs paid while the person was in a nursing home or mental institution. When you figure the costs you paid, you must subtract any reimbursement from insurance or from the person receiving care. 

How to claim the creditTo claim the credit, the Oregon Department of Human Services (DHS) must certify that the person
qualifies. Download the Low-Income Caregiver Credit form or call us to order it.

Send your completed form to DHS for certification. Instructions and the address for DHS are on the
form. Keep the completed form showing the certification and expenses paid with your Oregon income
tax records. 

No carryover. Your credit cannot be more than your tax liability for Oregon. Any credit not used this year is lost.

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Mobile home park closure, temporary provisions relating to tax credit for manufactured dwelling park closures following ORS 316.116

Did you move out of a mobile home park in 2013 because the park was closing? If so, you may be eligible for a credit. To qualify you must meet all of the following requirements:
  • Own your mobile home,
  • Rent space in a mobile home park that is closing,
  • Occupy your mobile home as your principal residence,
  • Receive notice that the park is closing, and
  • Move out (along with all members of your household) of the mobile home park because of the park closure notice.

If you qualify, you can claim a $5,000 refundable credit on your tax return for the year that your household moved out of the closing park. To claim this credit, fill out Schedule MPC and enter the credit amount on your return. Include Schedule MPC with your tax return.

Note: If you qualify for this credit, you may have received a payment from your landlord of $5,000, $7,000, or $9,000 depending on the size of your mobile home. These payments can be subtracted on your Oregon return if you claim the taxable income on your federal return. Read more about mobile home park payments subtraction.


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Mutually taxed gain on the sale of residential property ORS 316.109

[Credit code 720]

If you sell your residential property, your Oregon taxable gain will be the same as your federal taxable gain.

Exceptions: If you were renting out a house and then converted it to your personal residence, the Oregon basis may be different from the federal basis due to depreciation differences.

Generally, any gain you excluded on your federal return will also be excluded on your Oregon return. You qualify for this credit only if the gain on the sale of your residential property is taxed by both Oregon and another state or country.

For the same gain, you can claim either this credit or the credit for income taxes paid to another state, but not both. You are not eligible to claim this credit if you qualify for a credit for taxes paid to another state on the other state's tax return.

How much is the credit?

The credit is the smaller of:

 

​ ​ Mutually-taxed gain ​X ​​Other state's/country's tax after all other credits
Total income on the return of the other state/country

 

or

  • Eight percent of the gain taxed by the other state/country.


Mutually taxed gain. Your mutually taxed gain is the total gain from the sale of your residential property, reduced by any deductions or exclusions allowed by either the other state/country or Oregon.

No carryover. Your credit cannot be more than your tax liability for Oregon. Any credit not used this year is lost.

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Oregon Cultural Trust contributions ORS 315.675

[Credit code 722]

Did you make a donation to an Oregon nonprofit cultural organization during the tax year? If so, you can make a matching donation to the Trust for Cultural Development Account and get an Oregon tax credit.

How much is the credit?

You may get a credit of up to 100 percent of the amount of the matching contribution. The maximum credit is $500 per taxpayer ($1,000 on jointly filed returns). For a husband and wife who file separate returns, each may claim a share that would have been allowed on a joint return in proportion to the contribution each spouse made.

Corporations can claim a credit of up to $2,500 per tax year.

If you claim your Oregon Cultural Trust contribution as an itemized deduction on your Schedule A, you must add back that amount to income.

Be sure to keep receipts from both organizations with your tax records.

Part-year residents and nonresidents. Multiply the allowable credit by your Oregon percentage.

No carryforward. For individuals and corporations, the credit cannot be more than the tax liability for Oregon. Any credit not used this year is lost.

For more information about the Oregon Cultural Trust, contact the Oregon Arts Commission or go to their website at www.culturaltrust.org.

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Oregon Low Income Community Jobs Initiative ORS 315.533


A tax credit is available for making a qualified equity investment in a qualified community development entity. For more information on qualifying investments and entities, visit the Business Oregon website or contact John Saris at the Oregon Business Development Department at 503-986-0163.

How much is the credit?

The credit is equal to 39% of the purchase price of the qualified equity investment. It must be taken over seven years, beginning with the year of investment. The allowable tax credit for each of the seven years is:

  • -0- percent in the first and second years.
  • 7 percent of the purchase price in the third year.
  • 8 percent of the purchase price in each of the fourth through seventh years.

Note: No credit may be claimed until tax year 2014 for qualified investments made in tax year 2012.


How to claim the credit

You must obtain certification from the Oregon Business Development Department indicating the amount of your tax credit. Keep your certificate with your tax records.

Part-year residents and Nonresidents. Multiply your credit by your Oregon percentage.

Carryforward. The credit cannot be more than your tax liability. You can carry forward any unused credits to any succeeding tax year. This credit cannot be transferred or sold.

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Oregon Production Investment Fund (auction) ORS 315.514

[Credit code 737]

You may be able to claim a tax credit if you participated in the Oregon Production Investment Fund tax credit auction conducted by the Department of Revenue, in cooperation with the Oregon Film and Video Office. Proceeds from the auction go to the Oregon Production Investment Fund. Total credits certified by the Oregon Film and Video Office each fiscal year are limited to $10 million.

If you received a tax credit through the auction, your credit amount is shown on your certificate issued by the Oregon Film and Video Office. Claim the credit on the "other credits" line on your Oregon return.

If you claim any amount you paid for this credit as a deduction on your federal return, you must add back that amount to your Oregon income. You'll have an "other addition" on your Oregon return. For more information on the addition see Oregon Production Investment fund on the Additions page.

Part-year residents and Nonresidents. You can claim the full amount of the credit you received in the auction, limited by your tax liability as explained below.

Carryforward. The credit cannot be more than your tax liability. You can carry forward any unused credits over the next three years. If you don't use the carryforward within three years, it is lost. This credit cannot be transferred or sold.

Auction information. Visit our auction page for information on upcoming auctions and auction rules and procedures.

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Oregon Veterans' Home ORS 315.624

[Credit code 747]

Physicians who provide medical care to residents of an Oregon Veterans' Home (OVH) may be eligible for a credit of up to $5,000 per year.

Who can claim the credit?

Any resident or nonresident individual physician may qualify for the credit. The physician must be licensed to practice under ORS chapter 677. They must provide care to a minimum of at least eight residents at an OVH.

S corporation shareholders and partnership members may only claim a credit based on the care they provided. The full amount of the credit shall be allowed to each taxpayer who qualifies in an individual capacity.

Part-year residents and nonresidents. Your allowable credit must be prorated by your Oregon percentage.

How much is the credit?

The credit is equal to the lesser of:

  • $1,000 for every eight residents to whom the physician provides care at an OVH; or
  • $5,000.

How to claim the credit

You must submit with your tax return a letter from the OVH at which you provided care. The letter must state that you missed no more than 5 percent of your scheduled visits during the tax year.

No Carryforward. The credit may not exceed your tax liability for the year. There is no carry forward of unused credits.

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Political contributions ORS 316.102

[Credit code 723]

Oregon law allows a tax credit for political contributions.

Who can claim the credit?To qualify, you must have contributed money in the tax year you claim the credit. You must reduce
the amount of your contribution by the fair market value (FMV) of any item(s) or service(s) you receive in exchange for your contribution. Contributions of goods or services do not qualify. Keep receipts from the candidate or organization with your tax records. You can use copies of canceled checks as your receipt.

How much is the credit?Your credit is equal to your contribution, but limited to $100 on a joint return or $50 on a single or separate return. The $3 check-off on the Oregon tax return does not qualify for this credit.

Partners or S corporation shareholders can claim a credit for their share of political contributions made by the partnership or S corporation. The contribution must meet the statutory requirements. The $50 and $100 limits apply individually to each partner’s or shareholder’s return.

No carryforward. The credit cannot be more than your tax liability for Oregon. Any credit not used this year is lost.

Which contributions qualify?Candidates and their principal campaign committees. You can claim a credit for a contribution to a candidate for federal, state, or local elective office, or to the candidate’s principal campaign committee. To qualify, at least one of the following must occur in Oregon the same calendar year you made your contribution:

  • The candidate’s name must be listed on a primary, general, or special election ballot,
  • A prospective petition of nomination must be filed by or for the candidate,
  • A declaration of candidacy must be filed by or for the candidate,
  • A certificate of nomination must be filed by or for the candidate,
  • A designation of a principal campaign committee must be filed with the Oregon Secretary of State’s Office. Note: The designation must be made in each year a contribution is made to qualify under this provision.

Political action committees. You can claim a credit for contributions to political action committees (PACs). The organization must have certified the name of its political treasurer with the appropriate filing officer, usually the Secretary of State for statewide or regional elections, your county clerk for county elections, or your city recorder for city elections. PACs registered with the Federal Elections Commission may not be required to register in Oregon.

Political parties. Political parties can be national, state, or local committees of major political parties.
Oregon also allows a tax credit for contributions made to minor political parties that qualify under
state law. Contact the Oregon Secretary of State’s Office in Salem at 503-986-1518 to see if a particular party qualifies.

Newsletter fund—credit not allowed. Oregon does not allow a credit for contributions made to a newsletter fund.

Example 1: Holly contributes $275 for a fund-raising dinner for a presidential candidate. The FMV of the dinner was $35. Holly’s political contribution is $240. She must reduce her $275 contribution by the $35 FMV of the dinner she received. Being single, Holly’s political contribution credit is limited to $50.

Example 2: Burt donated a desk, chair, and a four drawer file cabinet to his favorite political action committee (PAC) headquarters. The FMV of the furniture is $410. Burt has a written receipt from the PAC. He cannot claim a political contribution credit because he didn’t contribute money to the PAC. His contribution of office furniture does not qualify for the credit.


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Pollution control facilities ORS 315.304

[Credit code 724]

Did you make an investment in a pollution control facility on or before December 31, 2007?

If so, you can file an optional preliminary application for the tax credit with the Department of Environmental Quality (DEQ) any time before you complete the pollution control facility. You must file an application for final tax credit with the DEQ within the first year after purchase or completion. The last date to submit an application was December 31, 2008. DEQ will make a final recommendation to the Environmental Quality Commission (EQC) based on the available information.

To contact the DEQ, write to: Oregon Department of Environmental Quality, Waste Management and Cleanup, 811 SW 6th, Portland OR 97204-1390, call in Portland 503-229-5696 or toll-free from an Oregon prefix 1-800-452-4011, ext. 6878. Or, go to DEQ's website. Keep a copy of the DEQ certificate with your tax records.

If you claim a property tax exemption, file the DEQ form with your county assessor. The property tax exemption for nonprofit corporations is valid for 20 years.

Carryforward. You can carry forward unused pollution control credits for three years. An additional three-year carryforward is allowed provided credits had not expired as of the 2001 tax year and the facility remains in operation during the additional carryforward period.

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Reforestation ORS 315.104

[Credit code 727]

2011 was the last year the State Forester issued preliminary certifications for this credit. However, you can carry forward any unused amount for three years after the tax year you claim(ed) the credit. The credit cannot be more than your tax liability. If you don't use the carryforward within three years, it is lost.

For more information on this credit, see last year's publication, go to the Oregon Department of Forestry website, or call 503-945-7368.

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Renewable energy development contribution (auction) ORS 315.326

[Credit code 749]

You may be able to claim a tax credit if you participated in the Oregon Renewable Energy Development tax credit auction conducted by the Department of Revenue, in cooperation with the Oregon Department of Energy. Proceeds from the auction go to a subaccount from which the Oregon Department of Energy will issue grants for renewable energy development in Oregon. Total credits certified by the Oregon Department of Energy each fiscal year are limited to $1.5 million.

If you received a tax credit through the auction, your credit amount is shown on your certificate issued by the Oregon Department of Energy. Claim the credit on the “other credits” line on your Oregon return.

If you claim any amount you paid for this credit as a deduction on your federal return, you must add back that amount to your Oregon income. You’ll have an “other addition” on your Oregon return. For more information on the addition, see renewable energy development contribution.

Part-year residents and Nonresidents. You can claim the full amount of the credit you received in the auction, limited by your tax liability as explained below. 

Carryforward. The credit cannot be more than your tax liability. You can carry forward any unused credits over the next three years. If you don’t use the carryforward within three years, it is lost. This credit cannot be transferred or sold.

Auction information. Visit our auction page for information on upcoming auctions and auction rules and procedures.


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Renewable energy resource equipment manufacturing facility ORS 315.341

[Credit code 748]

A tax credit is allowed for renewable energy resource equipment manufacturing facilities based on the cost certified by the Business Development Department or Department of Energy.

What qualifies?

The facility project must be located in Oregon and the final certification must be received from the Oregon Business Development Department (certificates issued on or after January 1, 2012), or the Oregon Department of Energy, (certificates issued before January 1, 2012).

How much is the credit?

The credit is 10 percent of the certified cost of the facility. It is taken in each of the five succeeding tax years beginning with the tax year in which the application for final certification is received by the Oregon Business Development Department. The total credit taken cannot exceed 50 percent of the certified cost of the facility.

How to apply for the credit

For an application, fee information, and assistance with the application process, contact the Oregon Business Development Department in Salem at 503-986-0123, or go to their website.

How to claim the credit

Apply for a final tax credit certificate when your project is finished. Business Development Department staff will review your actual and, when approved, will send you the final certificate. Keep a copy of the final certification with your Oregon tax records.

Carryforward. Your credit cannot be more than your tax liability. You can carry forward any unused credit over the next eight years. If you don't use the carry forward within eight years, it is lost.

Credit transfers

The owner or lessee of the facility may transfer the credit in exchange for a cash payment equal to the present day value (as determined by the Oregon Business Development Department) of the tax credit.

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Reservation enterprise zone ORS 285C.309

[Credit code 728]

Businesses in an Oregon reservation enterprise zone that pay tax to tribal governments can claim a credit against their Oregon income tax.

The credit is equal to either:

  • The tribal property tax on a business facility that is paid or incurred during the tax year, or
  • Any tribal tax paid or incurred during the tax year the business first begins to operate in the reservation enterprise zone.

The credit is allowed only if the tax is imposed uniformly in the territory.

Contact the Oregon Economic and Community Development Department for the location of reservation enterprise zones at their website.

Who can claim the credit?

The credit is available to individuals, partnerships, and corporations. Any business activity qualifies, except property leasing. The business must have begun in 2002 or later.

Part-year residents and nonresidents. Multiply the credit allowed a full-year resident by your Oregon percentage.

How do I claim the credit?

Fill out the form Reservation Enterprise Zone Tax Credit Worksheet. If you're unable to download the form call us to order a copy. Keep the completed form with your tax records.

No carryforward. The credit may not be more than your tax liability for Oregon. Any credit not used this year is lost.

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Residential energy ORS 316.116

[Credit code 729]

You can qualify for a credit on your Oregon income taxes by purchasing certain energy-efficient items.

What qualifies?Category one alternative energy devices:

  • Systems that use solar energy for space heating or 
  • Systems that use solar energy for water heating. 
  • Ground source heat pumps or geothermal systems. 
  • Any wind-powered device used to offset or supplement electricity.
  • Equipment used in the production of alternative fuels. 
  • Generators powered by alternative fuels and used to produce electricity. 
  • An energy-efficient appliance. 
  • Premium efficiency wood or pellet stoves.

Category two alternative energy devices:

  • Solar electric systems. 
  • Wind electric systems. 
  • Fuel cell systems.

Dishwashers, clothes washers, refrigerators, air conditioners, and boilers no longer qualify.

Who can claim the credit?Homeowners, renters, and contract buyers who purchase qualifying devices can apply for the credit. A person who pays the present value of the tax credit to the person who purchases the device may also apply for the credit.

Part-year residents and nonresidents. Multiply the credit allowed a full-year resident by your Oregon percentage.

How much is the credit?The tax credit is based on an estimate of how much energy the system will save in the first year. The value of the credit per kilowatt-hour (kWh) saved depends on the type of equipment or system. The maximum credit allowed for each category one device is $1,500.

The credit allowed for each category two device is $3 per watt of installed output, not to exceed 2,000 watts. For wind electric systems, the credit is $2 per watt up to 3,000 watts.

How to apply for the creditComplete an Application and Verification Form for Residential Energy Tax Credit Certification for the system or equipment you buy. Qualifying lists of systems or equipment are on the Oregon Department of Energy website at www.oregon.gov/energy. Send the application to the Oregon Department of Energy with proof of payment. When approved, you will get certification showing your qualified tax credit.

For an application form and lists of qualifying equipment, go to www.oregon.gov/energy or call 503-378-4040 in Salem or toll-free from an Oregon prefix at 1-800-221-8035.

How to claim the creditClaim the credit on your state income tax form in the tax year you purchased the device if it was operational by April 1 of the next year.

Example 1: You purchased a qualifying solar energy water heating system in December 2013 and had it installed and operating by February 2014. Claim the credit on your 2013 tax return.

Example 2: You purchased a qualifying ground source heat pump in October 2013 and had it installed and operating by May 2014. Claim the credit on your 2014 tax return. Don’t claim it on your 2013 return because the pump wasn’t in operation by April 1, 2014.

Keep your certification, a copy of your application, proof of payment, and any supporting documentation with your tax records. Do not include these items with your tax return.
Carryforward. The credit cannot be more than your tax liability for Oregon. You may carry forward any unused credit for up to five years. If you do not use the credit within five years, it is lost.

How does this affect property value?The legislature provided a property tax exemption for alternative energy devices. Ask your county assessor what installation of an alternative energy device will do to the assessed value of your property.



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Retirement income ORS 316.157

[Credit code 730]

Who can claim the credit? If you were age 62 or older on December 31, 2013, and receiving taxable retirement income, you can qualify for this credit. Retirement income includes payments in Oregon taxable income from:
  • State or local government public pensions.
  • Employee pensions.
  • Individual retirement plans.
  • Employee annuity plans.
  • Deferred compensation plans including defined benefits, profit sharing, and 401(k)s.
  • Federal pensions (includes military) not subtracted from Oregon taxable income.
How do you qualify for the credit?
  • Your household income is less than $22,500 ($45,000 if married filing jointly), and
  • Your Social Security and/or Tier 1 Railroad Retirement Board benefits are less than $7,500 ($15,000 if married filing jointly), and
  • Your household income plus your Social Security and Tier 1 Railroad Retirement Board benefits is less than $22,500 ($45,000 if married filing jointly).
You can claim this credit or the credit for the elderly or the disabled, but not both.

How much is the credit?Use the following worksheet to calculate your credit:


​1. Enter the retirement income of the eligible individual(s) (Form 40, line 8; or Form 40N or 40P Oregon column, lines 16 and 17). (Do not include social security/railroad retirement board benefits). 1.
​              
​2.
​Enter any federal pension income subtracted from Oregon income ​2. ​​
​3. ​Net Oregon taxable pension. Line 1 minus line 2. ​3. ​​​
​4. ​Enter $7,500 ($15,000 if married filing jointly). ​4. ​​
​5. ​Enter both spouses' total Social Security and Tier 1 Railroad Retirement Board benefits. ​5. ​​
​6. ​Line 4 minus line 5, but not less than -0-. ​6. ​​​
​7. ​Enter your household income. See the next section to determine household income. ​7. ​​​​
​8. ​Household income base. Enter $15,000 ($30,000 if married filing a joint return). ​8. ​​​​
​9. ​Line 7 minus line 8, but not less than -0-. ​9. ​​​​
​10. ​Line 6 minus line 9, but not less than -0-. ​10. ​​​​
​11. ​Enter the smaller of line 3 or line 10. ​11. ​​​
​12. ​Multiply line 11 by 9% (.09). This is your credit. ​12. ​​​​


No carryforward. The credit cannot be more than your tax liability for Oregon. Any credit not used this year is lost.



What’s included in household income?Household income generally includes all income (both taxable and nontaxable) each spouse received
during the year. Household income includes gross income reduced by adjustments as reported in your federal adjusted gross income (AGI).

You also need to include items not in your federal AGI. These items include but are not limited to:

  • Veteran’s and military benefits.
  • Gifts and grants (total amount minus $500).
  • Disability pay.
  • Nontaxable dividends (other than “return of capital”).
  • Inheritance.
  • Insurance proceeds.
  • Nontaxable interest.
  • Lottery winnings.
  • Railroad Retirement Board benefits (Tier 2 only).
  • Scholarships.
  • IRA conversions included in AGI.

See the household income checklist for more help.
Do not include:

  • Social Security and Tier 1 Railroad Retirement Board benefits.
  • Your state tax refund.
  • Pension income excluded from federal AGI that is a return of your contributions.
  • Pensions that are rolled over into an IRA that are not included in AGI.

To determine household income, you must separate income (or loss) from businesses, farms, rentals or royalties, and dispositions of tangible or intangible property. Combine all income from similar sources for net income or loss. Any net loss from the source is limited to $1,000. Net operating loss carrybacks or carryforwards are not allowed. Capital loss carryforwards are not allowed.

Example 1: Jack owns a farm and has a $4,000 loss. He is also in a partnership whose main activity is farming. Jack has income from the partnership of $1,500. His net farm loss is $2,500. He may claim only $1,000 of this loss to compute his household income. Any net loss Jack has from other sources is also limited to $1,000 each. If Jack is claiming more than a $1,000 loss on any line, he must
include a worksheet showing his computations.

If the combined total of your depreciation, depletion, and amortization deductions is more than $5,000, you must add the excess back into household income. You must also increase your household income by the Oregon income tax modification for depletion in excess of basis.

Example 2: Callie has a business with gross income of $32,000 for the year. She has a $11,000 depreciation deduction. Other business expenses are $24,500. She reports a business loss for federal purposes of $3,500. She recomputes her business income for household income purposes. The allowable depreciation deduction is limited to $5,000. She reports $2,500 business income, computed as follows: $32,000 – ($5,000 +$24,500) = $2,500.

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Riparian land ORS 315.113

[Credit code 735]

2011 was the last year this credit could be claimed. However, you can carry forward any unused credit for five years. The credit cannot be more than your tax liability for Oregon. If you don't use the carryforward within five years, it is lost. For more information on this credit, see the 2011 publication.

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Rural emergency medical technicians ORS 315.622

[Credit code 742]

A tax credit is available for emergency medical service providers in qualifying rural areas of Oregon.
The credit is based solely on determination of eligibility by the Office of Rural Health.

Who can claim the credit?Emergency medical service providers (EMS-Ps) who provide volunteer EMS-P services in a qualifying rural area that comprise at least 20 percent of the total EMS-P services provided by the individual in the tax year. A qualifying rural area is an area in Oregon that is located at least 25 miles from any city with a population of 30,000 or more.

Part-year residents and nonresidents. If you meet the eligibility requirements, you may receive a credit. Multiply the credit by your Oregon percentage.

How much is the credit?The credit is the lesser of $250 or your tax liability for the year. There is no carryforward of unused tax credits.

How to claim the creditYou must apply to the Office of Rural Health each year for confirmation of eligibility. Forms are available on their website at www.ohsu.edu/oregonruralhealth. Contact Rural Health in Portland at 503-494-4450 if you have questions or need assistance. Keep a copy of the confirmation letter with your tax records for each year you claim the credit.

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Rural health practitioners ORS 315.613

[Credit code 731]


A tax credit is available for health practitioners in certain rural areas of Oregon. The credit is based on
eligibility requirements determined by the Office of Rural Health.

Who can claim the credit?Physicians, dentists, podiatrists, optometrists, physician assistants, certified registered nurse anesthetists, and nurse practitioners can qualify for the credit. You must have a rural practice in Oregon that amounts to 60 percent or more of your business.

S corporations and partnerships do not qualify for the credit. However, shareholders and partners can get the credit on their individual Oregon income tax returns if they meet the eligibility requirements.

Part-year residents and nonresidents. If you meet the eligibility requirements, you may receive a credit. Multiply the credit by your Oregon percentage.

How much is the credit? The credit is the least of $5,000, the amount certified by Rural Health, or your tax liability for the year. You can claim the credit as long as you have a qualifying practice. There is no carryforward of unused tax credits.

How to claim the creditYou must apply to the Office of Rural Health each year for confirmation of eligibility. Visit their website
at www.ohsu.edu/oregonruralhealth for more information. Contact Rural Health in Portland at 503-
494-4450 to request an application. Keep a copy of the confirmation letter with your tax records for each year you claim the credit..

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Transportation projects ORS 315.336

[Credit code 751]

A tax credit is allowed for transportation projects certified by the Department of Energy.

What qualifies?The transportation project must be located in Oregon and the final certification must be received from the Oregon Department of Energy.

How much is the credit?For tax year:

2012, the credit is 25 percent of the certified cost.
2013, the credit is 20 percent of the certified cost.
2014, the credit is 15 percent of the certified cost.
2015, the credit is 10 percent of the certified cost.


There is an exception for alternative fuel vehicle infrastructure projects. The credit is limited to 35
percent of the certified costs for all applicable years.

How to apply for the creditFor an application, fee information, and assistance with the application process, contact the Oregon
Department of Energy at 1-800-221-8035 (toll-free from an Oregon prefix), in Salem at 503-378-4040, or go to www.oregon.gov/energy.

How to claim the creditApply for a final tax credit certificate when your project is finished. Department of Energy staff will
review your actual expenses and, when approved, will send you the final certificate. Keep a copy of the final certification with your Oregon tax records.

Carryforward. Your credit cannot be more than your tax liability. You can carry forward any unused credit over the next five years. If you don’t use the carry forward within five years, it is lost.

Credit TransfersThe owner of the project may transfer the credit in exchange for cash payment equal to the present day value (as determined by the Department of Energy) of the tax credit. The credit may only be transferred to another personal income taxpayer, a C corporation or an S corporation. Transfer to a partnership is not allowed. The credit may only be transferred once.

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University venture development fund contributions ORS 315.521

[Credit code 739]

A tax credit is available for contributions to Oregon university venture development funds.

Who can claim the credit?

Any taxpayer who makes a qualifying charitable donation to an Oregon university venture development fund is eligible for the credit.

If you claim your contribution as a deduction on your federal return, you must add back that amount to your Oregon income. You'll have an "other addition" on your Oregon return. For more information on the addition, see university venture development fund contributions on the Additions page.

S corporations and partnerships may claim a credit for their donations.

Part-year residents and nonresidents. Multiply the allowable credit by your Oregon percentage.

How much is the credit?

The taxpayer's credit is 60 percent of the amount stated on the tax credit certificate.

The amount allowed for 2013 is the least of:

  • 20 percent of the amount actually contributed to the fund,
  • $50,000, or
  • The tax liability of the taxpayer.

How to claim the credit

The university that established the fund will issue a tax credit certificate to you. Keep this certificate with your tax records.

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Wolf depredation Chapter 65 Oregon Laws 2012

A tax credit is available if your livestock is killed during the tax year by a wolf. Livestock is defined in
ORS 610.150. Examples of livestock include, but are not limited to, cattle, goats, sheep, and swine.

Who can claim the credit?Individuals may claim a refundable tax credit and corporations a non-refundable tax credit for killed
livestock.

How much is the credit? The credit is equal to the current market value of your livestock that is killed by a wolf. You must
reduce your credit by any amount that is received as compensation for the killed livestock. In order to
qualify you must provide evidence to the Oregon Department of Fish and Wildlife showing that your
livestock was killed due to wolf depredation.

How to claim the creditYou must obtain certification from the Oregon Department of Fish and Wildlife indicating the
amount of your tax credit. The total amount of tax credits issued by the Oregon Department of Fish and Wildlife is limited to $37,500 per tax year. Certifications will be issued in the order in which completed applications are received.

Include the amount of your credit on the estimated tax payment line on your return and check the box
below the line labeled “Wolf depredation.”

Keep your certificate with your tax records. If you were required to reduce your credit because you were compensated for the loss of livestock, also keep a statement showing the calculation of your tax credit. 

Part-year residents and Nonresidents. Multiply your credit by your Oregon percentage.

Carryforward. For Corporations the credit cannot be more than your tax liability. You can carry forward any unused credits over the next three years. If you don’t use the carryforward within three years, it is lost. This credit cannot be transferred or sold.


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Working Family Child Care (WFC) ORS 315.262

This refundable credit is available to low-income working families with qualifying child care expenses. To qualify, all of the following must be true:

  • You must be an Oregon resident with at least $8,400 of earned income, or be a nonresident with at least $8,400 of earned income from Oregon sources, and
  • You have $3,300 or less of investment income (such as interest, dividends, and capital gains), and 
  • Your adjusted gross income is less than the limits for your household size shown on the working family child care credit tables, and 
  • You paid qualifying child care expenses so you (and your spouse/RDP, if married filing jointly) could work or attend school at least part time or you are exempt from this requirement due to a qualifying disability, and 
  • You paid qualifying child care expenses for your qualifying child. A qualifying child is your child, step child, grandchild, step grandchild, brother, sister, stepbrother, stepsister, nephew, niece, step nephew, step niece, eligible foster child, or adopted child who:
    • lived with you for more than half the year, and 
    • was under the age of 13, or
    • was a child you can claim the additional child with a disability exemption credit, and 
  • Your child care provider was not the child’s parent or guardian, or your relative or step relative under age 19.

Sometimes a child may be the qualifying child of more than one person. Although the child is the qualifying child of each of these persons, only one of them can actually treat the child as their qualifying child for WFC.

Note: If you are married/RDP filing separately, you must be legally separated or permanently living apart on December 31, 2013, to qualify.

If you qualify, you must complete one of the following:

  • Full-year resident: Schedule WFC, Oregon Working Family Child Care Credit for Form 40, or 
  • Part-year resident or nonresident: Schedule WFCN/P, Oregon Working Family Child Care Credit for Form 40N and Form 40P filers.

Complete all information on the schedule. Failing to include a schedule or including an incomplete schedule may result in delay or denial of your working family child care credit.
To download the schedule, go to our website, or call us to order a copy.

Qualified disabled for WFC. Do you or your spouse have a disability that severely restricts or prevents you or your spouse’s ability to perform an activity of daily living (bathing, dressing, feeding, toileting, transporting, etc.)? Does the disability also prevent you or your spouse from working, going to school, and caring for your children? If you answered yes to both questions, you may qualify for the working family child care credit (WFC). Only one spouse can qualify for the exception. The other spouse must still work or attend school at least part time. The qualifications are not the same as the severely disabled exemption credit.

To claim the exception, the disabled taxpayer and their physician need to fill out Form WFC-DP stating that you or your spouse has a qualifying disability. Go to our website or contact us to get Form WFC-DP. This form will need to be completed and included each year that your spouse meets the exception. Once Form WFC-DP is filled out, check the box “Form WFC-DP is included” on Schedule WFC next to you or your spouse’s name. Remember to include Form WFC-DP and keep a copy of the form with your tax records and with your doctor.

Example 1: Jenny and Ed are married and have three children. Jenny works full time and Ed does not work or attend school and is receiving disability for headaches. Ed does not need assistance with any of the activities of daily living. Ed’s disability does not qualify for the exception. Jenny and Ed cannot claim this credit for their child care expenses.

Example 2: David and Sue are married and have two children. David works full time. Sue is unable to work because she has a brain tumor. Sue has a home care worker come to their home daily because she is unable to care for herself while David is away at work. David and Sue pay $750 a month for child care and $800 for care for Sue. Sue and her doctor completed Form WFC-DP showing that Sue has a qualifying disability. David and Sue can claim this credit for the $750 a month they paid for child care. The amount paid for Sue’s care does not qualify for this credit.

Household size calculation. Household size is the number of people you claim as exemptions on your federal tax return who are related to you by blood, marriage/RDP, or adoption and live in your home. Your household size can include your child of whom you have primary custody, even if you allowed the child’s other parent to claim the exemption on his or her tax return. You cannot include people you’re entitled to claim on your tax return who did not live with you in your home during 2013. For this credit, an individual cannot be counted in household size on more than one return. If you are in an RDP, remember to use your “as-if” federal tax return to compute your household size.

Example 3: Rusty and Deb are not married and are the parents of two children. They maintain separate households and have joint custody of both children. The children live more than half the year with Deb. Even though they’re Deb’s qualifying children, she releases the dependent exemption for one child to Rusty. Deb’s household size is three (herself, one dependent child whose exemption she claims, and one dependent child whose exemption is released to Rusty). Rusty cannot claim the WFC because neither of the children lived with him for more than half the year.

Example 4: Jay and Rena have three qualifying children. They also support Rena’s parents who live in Mexico. They claim seven exemptions on their tax return. Jay and Rena’s household size is five, because only five of them live in their home.

Qualifying child care expenses paid in 2013 

Qualifying child care expenses are paid primarily so you (and your spouse/RDP) can work or attend school. You can pay your expenses with pre-tax dollars from an employer benefit plan such as a cafeteria plan or flexible spending arrangement and still qualify to claim this credit. You must pay for the child care during 2013 for the payments to be qualifying child care expenses.

Qualifying child care expenses don’t include costs for your child to attend a public or private school
or activities such as gymnastics or soccer. You can’t claim expenses that are paid by someone else such as a state assistance agency. You can claim only the expenses you actually paid.

Proof of qualifying child care expenses. You must be able to prove you paid the child care expenses to claim this credit. Acceptable proof includes, but is not limited to, copies of:

  • Canceled checks,
  • Money order stubs,
  • Duplicate checks along with bank statements, and
  • Specific receipts from the child care provider. 
We could ask for proof at any time while processing your tax return or any time later. If you pay a friend or relative to watch your children, you may be asked to prove you actually paid qualifying child care expenses. Be sure to ask for a signed receipt from your child care provider when you pay for care.

 
If you exchange services or goods instead of paying for the child care with cash:

  • You must claim the income (the value of the child care) on your tax return before you are eligible for this credit.
  • The child care provider must also claim the income (the value of the goods or services they received from you).

If you are paying a friend or relative to care for your children, you may be required to provide third-party proof that you paid for the care. Third-party proof is proof from someone not directly involved in the transaction. Common forms of third-party proof include:

  • Copies of canceled checks;
  • Money order stubs.

A receipt from your friend or relative does not constitute proof.

Example 5: Michelle and George are married and have two children. Michelle and George both work full time. Michelle’s mother, Carol, lives with them. Michelle and George pay Carol $500 a month in cash to watch their children while they work. Michelle and George do not have proof that they paid Carol and Carol is not paying rent to live at their home. Because the payments were made in cash to a relative and there is no proof of payment, Michelle and George cannot claim this credit.

Example 6: Amanda has two children and works full time. Amanda’s mother, Tammy, lives in the same town and watches her grandchildren while Amanda works. She does not take care of any other children. Amanda pays Tammy $400 a month in cash. Amanda does not have further proof other than the receipts written by Tammy that she received $400 in cash at the beginning of each month. Tammy does not report this income on her tax return. Amanda cannot claim this credit because she has no proof of payment.

Example 7: Jason and Sarah are married and have two children. Jason and Sarah both work full time. Jason’s mother, Cheryl, lives nearby and watches their children. Cheryl also takes care of other children in her home. Jason and Sarah pay Cheryl $750 a month by check and receive receipts from Cheryl at the time of payment. Cheryl claims all child care income on her tax return. Jason and Sarah can claim this credit because they have proof of payment to their relative.

Example 8: Candice and Doug are married and have a child. Candice works full time and Doug is in prison. Candice pays a daycare center $400 a month to watch her child. Candice and Doug cannot claim the credit because Doug is not working or going to school and does not have a qualifying disability. 

Example 9: Jeff works for a company that offers dependent care benefits through a plan administrator. He takes advantage of this employer benefit and contributes $4,000 pre-tax each year to a flexible spending account (FSA) plan. Jeff gives the plan administrator the necessary documents so he can be reimbursed for his child care expenses. His employer reports $4,000 of dependent care benefits in box 10 of his W-2. Jeff has $5,000 total in child care expenses for his two qualifying children. He paid $1,000 with after-tax dollars, and he was reimbursed $4,000 from his pre-tax FSA. Jeff may claim the working family child care credit based on $5,000 in qualifying child care expenses.

Example 10: Lee has a five-year-old qualifying child who attends a local academy. He pays $750 per month for his son’s kindergarten and child care. Of that he pays $500 for child care and $250 for his child’s education. Lee can only claim $500 per month as qualifying child care.

Example 11: Cate qualifies for state assistance in paying her child care expenses. The child care provider charges $600 per month to care for her two children. Of that, the state pays $450 and Cate has a co-pay of $150. Cate cannot claim the entire monthly amount because she did not pay it. She can only claim the amount she actually paid, $150 per month.

Qualifying child information. You must provide the following information of each qualifying child: full name, Social Security number, date of birth, his or her relationship to you, and the portion of the qualifying expenses that apply to each.

Example 12: Leona is a resident of Washington. She works in Washington and Oregon. Her federal adjusted gross income on Form 40N, line 30a is $27,100. Leona earned $8,500 from her Oregon employment and the balance from her Washington employment. She paid $4,440 to her child care provider to care for her qualifying child Jesse, age 8. Leona can claim this credit because she has at least $8,400 of earned income from Oregon sources.

Example 13: Max is a resident of Washington. He works in Washington, Idaho, and Oregon. His federal adjusted gross income on Form 40N, line 30a is $19,900. Jack earned $5,200 from his Oregon employment and the balance from his Washington and Idaho employment. He paid $3,880 to three child care providers to care for his two qualifying children. Jack cannot claim this credit because he has less than $8,400 of earned income from Oregon sources.

Computation of credit. You must have already determined your federal adjusted gross income (AGI) to claim this credit. You’ll need a copy of your federal tax return to complete your Schedule WFC, which has the worksheet and tables needed to compute your WFC credit.

To download a copy of Schedule WFC go to our website or call us to order it. Schedule WFC must be included and filed with your Oregon tax return.

Schedule WFC Relationship Codes

Grandchild GC
Son S
Daughter D
Sister-in-law SL
Uncle U
Cousin CS
Stepson SS
Nephew NW
Aunt A
Brother-in-law BL
Stepdaughter SD
Niece NC
Brother SB
Eligible foster child EF
Sister SB
Other O
None N