Oregon Response – State Conformity With Federal Changes

Oregon responses are in bold print below:

Disaster Tax Relief:

  • Qualified Hurricane casualty loss deductions – For federal purposes a qualified hurricane disaster casualty loss is calculated as the loss less $500. The 10% AGI limit does not apply to these casualty losses. The deductible loss can be taken as either an itemized deduction or an increase in the taxpayer’s standard deduction. –  If the TP claims a disaster related loss on the federal return itemized deductions, it will flow through to the Oregon return. However, if the TP claims standard deduction for federal, they can still separately claim the itemized deductions for Oregon only, if the itemized are larger than the standard deduction. But, they must have lived in a Federally Declared Disaster zone or had affected property within the Federally Declared Disaster zone during the dates prescribed by the IRS to receive the threshold and filing benefits. Oregon did not have any declared zones and I do not see where we are disconnected from it.

  • Qualified retirement plan distributions for individuals that were in a Hurricane disaster area are not subject to early withdrawal penalty and may be taxed over a three year period – The penalty does not impact the Oregon return and reporting of the income will flow through to the Oregon return when reported for federal purposes.

  • Charitable contributions for hurricane relief are not subject to the overall limit on itemized deductions or the 50% AGI limit – Federal itemized deductions flow through to the Oregon return.

Itemized Deductions – Medical deduction threshold of 7.5%  (Was supposed to be 10% for all taxpayers before the Tax Cuts and Jobs Act was passed) – This does not impact the Oregon return since we switched to the Special Oregon Medical subtraction several years ago. Federal itemized deductions flow through to the Oregon return.

 

Bonus Depreciation:

  • If your state allows bonus depreciation will you allow the 100% bonus depreciation percentage for qualified assets (both new and used) placed in service after September 27, 2017?
  • If you will allow for 100% bonus depreciation will you allow a taxpayer to elect to use a 50% bonus rate for assets placed in service between September 28, 2017 and December 31, 2017?
  • If you allow bonus depreciation will you allow the new 100% rate for qualified film, TV and theatrical production assets?  Bonus depreciation will be examined during the February legislative session. For 2017 tax returns, except for a few provisions around assets placed in service in 2009 and 2010, Oregon depreciation is generally the same as reported on the federal return.

Does your state require the legislature to meet in order to conform with any federal changes signed into law during the year? If so when will they meet? The Oregon legislature will need to meet to disconnect from any federal changes. Session will end March 5, 2018.