What military pay qualifies for an Oregon subtraction?

If you included U.S. military pay in your federal taxable income, you may qualify for a subtraction on your Oregon return.

You can subtract all military pay earned while stationed outside Oregon during the year plus up to $6,000 military pay earned in Oregon. Note: Your total subtraction cannot be more than your total taxable military pay income.

Guard and reserve annual training, weekend drills, and inactive duty training ARE ELIGIBLE for this subtraction.

For more information, go to the Military personnel filing information section of the Oregon Department of Revenue website.

Example: Barry, an Oregon resident, enlisted in the Army in 2010. From January to August 2013, he was stationed at Fort Lewis, Washington and he earned $24,000 in military pay. From August through December, he was a recruiter in Oregon and earned $12,000. He can subtract the $24,000 earned outside Oregon and $6,000 of the income earned in Oregon.

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