Oregon taxing federal stimulus payments on 2020 returns

[Jeff Smith]

Where do you input the stimulus payments clients have received within atx?

[BulldogTom]

Go to line 30 on the 1040 and click the green arrow.   It will take you to the form.    You will need to read it carefully and check the correct boxes to make it work.   Pretty simple when you get through it the first time.

Tom
Modesto, CA

[Lee B]

The title to this thread is somewhat misleading, since Oregon does not consider the stimulus rebates to be taxable income.

However the calculation of Oregon Taxable Income can be affected in some situations.

Oregon allows a subtraction for Federal Tax Liability capped at $6,950.

Since the stimulus rebates are considered to to be credits which reduce Federal Tax Liability,

some Oregon taxpayers may end up paying $ 300 or $400 more in Oregon Tax due to the reduction in their Federal Tax Liability.

However many families whose Federal Tax Liability is zero due to EITC and or CTC wil not be affected.

Also higher income taxpayers whose Federal Tax Liability is not reduced below the $ 6,950 cap will not be affected.

[Pacun]

19 hours ago, Jeff Smith said:

Where do you input the stimulus payments clients have received within atx?

You DON'T put it anywhere.

You only need to enter it if the client didn't received the full, deserving amount. 

[Lee B]

Interesting, in Drake if you don't input the number received  you get a red error message.

[jklcpa]

11 minutes ago, cbslee said:

Interesting, in Drake if you don't input the number received  you get a red error message.

This is annoying me with every return I work on. I hope we get a program update to allow the preparers to check the box at the bottom that says not to claim the RRC.

[DANRVAN]

16 hours ago, Pacun said:

 

You only need to enter it if the client didn't received the full, deserving amount. 

For Oregon you do need to input it in order to calculate the potential adjustment of the state deduction for federal tax.

[DANRVAN]

On 2/23/2021 at 9:56 PM, cbslee said:

The title to this thread is somewhat misleading, since Oregon does not consider the stimulus rebates to be taxable income.

However the calculation of Oregon Taxable Income can be affected in some situations.

 

Right, it is a federal tax credit that can affect the federal tax subtraction along with AOC and PTC.  See Oregon pub 17 for details.

[Jim Oh Bkkr]

17 hours ago, jklcpa said:

This is annoying me with every return

Ditto!   There is a link on Scr 1 if you haven't found it.  Why not a "got 'em both" check box?

[jklcpa]

3 hours ago, Jim Oh Bkkr said:

Ditto!   There is a link on Scr 1 if you haven't found it.  Why not a "got 'em both" check box?

I do use that link and agree that a checkbox would be very helpful.

[Pacun]

I wonder if it is mandatory to enter the amount received on the federal level and that we are doing it wrong.

 

[Lee B]

The Oregon Legislature will be considering a bill just introduced to add back any reduction of the taxpayer's federal tax liability by the total stimulus rebates received.

Well, if clients don't want to wait to see what happens, my crystal ball says there will be  lots amendments for several hundred dollars.

I wonder could you just file the federal tax return and put the state return on hold until the situation is clarified.

[Lion EA]

If Oregon has a separate e-file signature form that the client will sign later, you could e-file the federal and hold the Oregon return for that later signature...

(I'm in CT which accepts the federal 8879, so I have no choice; well, I do for NY that decouples for my commuter returns.)

[Pacun]

Hold to the state, have the sign later. For CT, I would ask clients to sign two forms (one just before Fed is sent and another dated just before the state is sent) just to be covered. 

I hold the states when something is pending vs amending.