What's new for tax year 2018
Due dates for individuals
March 15, 2019
- Partnership returns. Please see OR-65 for due dates for non-calendar-year filers.
April 15, 2019
- 2018 individual income tax and balance-due payments.
- 2018 statewide transit individual tax returns and balance-due payments.
- 2018 contributions to a Roth or traditional IRA
- 2018 trust and estate returns (Form OR-41) and payments.
- 2018 TriMet and Lane Transit District self-employment tax returns and payments.
- 2019 first quarter individual estimated tax payments.
- Last day to file individual refund claims for tax year 2015.
- Senior and disabled property tax deferral applications.
June 17, 2019
- 2019 second quarter individual estimated tax payments.
September 16, 2019
- 2019 third quarter individual estimated tax payments.
October 15, 2019
- 2018 individual income tax returns filed on extension.
January 15, 2020
- 2019 fourth quarter individual estimated tax payments.
The following information is a summary of updates for tax year 2018. See Publication OR-17 for full details.
Federal tax law changes
Federal tax reform. Congress made changes to several provisions in the Internal Revenue Code (IRC) in December 2017 as part of legislation popularly known as the "Tax Cuts and Jobs Act." Most of the changes for personal income taxpayers are in effect for tax years 2018 through 2025. The federal changes listed below may also affect your Oregon return.
- Standard deduction. The federal standard deduction amount was increased for all filers. As a result, some Oregon filers won't have a federal filing requirement, but they may still have an Oregon filing requirement.
- Personal exemption deduction. This deduction from adjusted gross income (AGI) was suspended for tax years 2018 through 2025. This change doesn't affect Oregon taxable income, but it may affect the way dependents are reported on the Oregon return.
- Section 529 college savings plan funds used for K-12 expenses. The federal tax exemption for earnings on 529 accounts was expanded to include funds used for K-12 tuition. Oregon is disconnected from this change. Funds and earnings from Oregon 529 accounts may be used only for higher education expenses.
- Achieving a Better Life Experience (ABLE) account contributions. The beneficiary of an ABLE account may contribute their own wages to the account without regard to the federal limit on annual contributions. Oregon's subtraction limit isn't affected by this change.
- Rollovers from 529 savings plan accounts to ABLE accounts. These rollovers are considered qualified withdrawals and don't require an Oregon addition. However, they don't qualify for the subtraction for contributions to an ABLE account if the funds were previously subtracted as a contribution to a 529 account.
- Medical expense itemized deduction 7.5 percent AGI floor. The AGI floor for the medical expense deduction was rolled back to 7.5 percent for the 2017 and 2018 tax years for all taxpayers.
- State and local tax itemized deduction. There's now a $10,000 limit on the combined total of state and local income and property taxes you can deduct. The limit is $5,000 if your filing status is married filing separately. These limits also apply to Oregon itemized deductions.
- Casualty and theft loss itemized deduction. This deduction has been suspended except for casualty losses resulting from presidentially declared disasters. Oregon follows all federal treatment with regard to such disasters, including extensions of time to file returns and make estimated payments.
- Suspended miscellaneous itemized deductions subject to the 2 percent of AGI limit. The suspended deductions include the following:
- Employee business expenses.
- Tax preparation fees.
- Claim of right income repayments of $3,000 or less.
- Certain investment expenses.
- Overall limit on itemized deductions. The limit on itemized deductions for taxpayers with AGI above a certain amount has been suspended.
- Qualified business income deduction (QBID). The QBID is a deduction for certain sole proprietors and owners of pass-through entities. Oregon is disconnected from this deduction. This deduction doesn't flow through to the Oregon return, so there is no addition to report.
- Net operating losses (NOLs). NOLs other than from farming may no longer be carried back from loss years after 2017. Farming NOLs may be carried back two years (instead of five) from loss years after 2017. NOLs from tax years after 2017 may be carried forward indefinitely but are limited to 80 percent of federal taxable income for the carryforward year.
- Alimony received or paid. The change to this income item and deduction will affect tax years after 2018.
- Business expenses. Changes to depreciation and other business expenses will flow through to your Oregon return. See the 2018 edition of IRS Publication 535, Business Expenses.
- Moving expense deduction. This deduction has been suspended for all taxpayers except active duty military personnel and their spouses who relocate due to a permanent change in duty station.
- Like-kind (1031) exchanges. This method of deferring gain on the disposition of business or investment property that isn't held primarily for sale is now limited to real property only. Nonresidents who dispose of personal property located in Oregon will no longer be required to file Form OR-24 when they exchange it for property located outside of Oregon because they can't defer the gain.
- Repatriation of deferred foreign income. This type of foreign income is taxed at a special federal rate. Oregon taxpayers with this income will have an addition on their 2018 return.
- Global intangible low-taxed income (GILTI). This is a type of foreign income received by shareholders of certain foreign corporations.
- Repeal of qualified production activities income (QPAI) deduction. Oregon wasn't tied to this deduction, which required an addition with an adjustment for part-year residents and nonresidents. The addition and adjustment on the Oregon return are no longer required.
- Partnership technical terminations. Partnerships with a change in ownership during the tax year will no longer need to report a technical termination or pay the additional Oregon partnership tax.
Oregon disconnects from federal tax law
- IRC Section 139A tax exemption for federal subsidies for employer prescription drug plans. If you have this type of business income, you'll have an addition on your Oregon return.
- IRC Section 529 tax exemption for earnings on college savings plan funds used for K-12 tuition. Oregon 529 plan funds may be used for higher education expenses only. If previously subtracted contributions are withdrawn and used for K-12 tuition, you'll have an addition on your Oregon return.
- IRC Section 199A deduction for noncorporate qualified business income (QBID). Oregon is disconnected from the QBID. This is a deduction from federal AGI and doesn't flow through to the Oregon return so there is no addition to report.
New for Oregon
- Oregon Schedule OR-A. Oregon has developed its own version of the schedule used for reporting itemized deductions that aren't reported elsewhere on the return. Oregon's version is similar to the federal Schedule A but was designed to meet the needs of Oregon taxpayers.
- Oregon Form OR-W-4. Because of recent changes to federal Forms W-4 and W-4P, Oregon will have a separate W-4 for state personal income tax withholding. Using Form OR-W-4 will help you more accurately withhold state taxes from your wages or pension.
- New check boxes. Two check boxes were added to the front page of the return forms:
- Federal Form 8886. If you filed federal Form 8886, Reportable Transaction Disclosure Statement, mark this box on your return.
- Federal disaster relief. If you were affected by a presidentially declared disaster, check the "Federal disaster relief" box.
- Federal tax liability subtraction. The federal tax subtraction limit is $6,650 ($3,325 if married filing separately) for 2018. It may be limited further based on your adjusted gross income (AGI).
- Oregon 529 College Savings Network and ABLE account limits. Contribution limits have increased to $4,750 for taxpayers filing joint returns and $2,375 for all others.
- Special Oregon medical subtraction. You or your spouse must be age 65 or older on December 31, 2018 to qualify for the subtraction.
- Tuition and fees deduction and subtraction. As of the date this publication was printed, Congress had not renewed the federal tuition and fees deduction for tax years after December 31, 2017. Unless Congress extends the sunset date, the deduction and the related Oregon subtraction won't be available for tax years beginning on or after January 1, 2018.
- Oregon qualified business income reduced tax rate. This special tax rate for pass-through entities doing business in Oregon has been expanded so that sole proprietorships may now qualify.
- Credit change. The former biomass tax credit has sunset, although unused credit amounts may be carried forward through tax year 2021. This credit has been replaced with a certified credit for producers and collectors of bovine (cattle) manure.
- New tax credit auction. There is a new tax credit available through an auction to benefit the Oregon Opportunity Grant Fund.
- Rural health practitioners credit. This credit is no longer available to medical practitioners who have adjusted gross income more than $300,000 unless the medical practitioner is a general surgeon, a physician who specializes in obstetrics, or a provider of obstetrical services.
- Working family household and dependent care credit (WFHDC). If you paid dependent care expenses while you attended school, and you're not married, you may now qualify for the WFHDC. See the instructions for Schedule OR-WFHDC.
- Statewide transit tax. This is a new income tax that will help fund public transportation services and improvements within Oregon. The tax is equal to one-tenth of 1 percent (0.1% or 0.001) of the wages received by an employee who is an Oregon resident, or an employee who is a nonresident but who performs services in Oregon. If you are an Oregon resident or nonresident and work for a business located in Oregon, your employer is required to automatically withhold the STI tax from your wages. If you are an Oregon resident and work for an employer located outside of Oregon, your employer isn't required to withhold the tax on your behalf, but may choose to do so voluntarily. If your out-of-state employer doesn't withhold the STI tax from your wages, you must file Form OR-STI, Statewide Transit Individual Tax Return, and pay the tax due by April 15, 2019. See the instructions for Form OR-STI.
- Market-based sourcing. For tax years beginning on or after January 1, 2018, nonresident taxpayers must apportion their business income from sales of services and intangible property according to market-based sourcing principles rather than cost of performance.
Click the following links for information about: