Questions & Answers
What is the credit for income taxes paid to another state?
Did you pay income taxes to another state or U.S. territory on income that is also taxed by Oregon? If so, you may be able to claim this credit.
If you were a full-year Oregon resident and had income taxed by Arizona, California, Indiana, or Virginia, you can't claim the credit on your Oregon return. However, you can claim the credit on the nonresident return you file with those states.
Note: If you try to claim the credit for taxes paid to another state on your Arizona, California, Indiana, or Virginia nonresident return and that state doesn't allow the credit, you may amend your Oregon return to claim the credit for taxes paid to that state.
This credit is only for state income tax. You can't claim this credit for city or county income tax, sales tax, alternative minimum tax (AMT), property tax, school tax, or building funds.
Your credit is the smallest of the following:
If you were a full-year Oregon resident and had income taxed by Arizona, California, Indiana, or Virginia, you can't claim the credit on your Oregon return. However, you can claim the credit on the nonresident return you file with those states.
Note: If you try to claim the credit for taxes paid to another state on your Arizona, California, Indiana, or Virginia nonresident return and that state doesn't allow the credit, you may amend your Oregon return to claim the credit for taxes paid to that state.
This credit is only for state income tax. You can't claim this credit for city or county income tax, sales tax, alternative minimum tax (AMT), property tax, school tax, or building funds.
Your credit is the smallest of the following:
- The 2021 tax actually paid to the other state.
- Your Oregon tax liability after all credits, except credits for income taxes paid to other states.
- The amount calculated using the following formula: Divide your modified adjusted gross income (MAGI) taxed by both states by your total MAGI. Multiply the result by your Oregon tax after subtracting all other credits.
