Or. Admin. R. 150-316-0197

Current through Register Vol. 63, No. 5, May 1, 2024

Section 150-316-0197 - Nonresident Deduction for Contributions to IRA, Keogh, or Qualified Medical Savings Accounts

(1) Nonresident individuals who are allowed a deduction for contributions made to Keoghs, SEPs, individual retirement accounts (IRAs), and qualified savings accounts (MSA) for federal purposes shall also be allowed a deduction for Oregon purposes. The deduction for Oregon is limited to a percentage of the federal deduction (not to exceed 100 percent).

(2) For contributions made to a qualified Keogh or SEP plan under section 401 of the Internal Revenue Code, the deduction for Oregon is equal to the federal deduction times the ratio of Oregon earned income over earned income from all source. In general, "earned income" is the net earnings from self-employment in a trade, business, or profession in which the taxpayer performs personal service.

(3) For contributions made to an IRA account under section 219 of the Internal Revenue Code, the deduction for Oregon is equal to the federal deduction times the ratio of Oregon compensation over compensation from all sources. In general, "compensation" includes alimony, wages, professional fees, or other amounts derived from or received from personal services rendered and included in gross income for the tax year. It does not include pensions, annuities, or other forms of deferred compensation.

Example: Assume a nonresident taxpayer had a $2,000 IRA deduction for federal purposes. His federal and Oregon wages were $40,000 and $20,000, respectively. His Oregon deduction would be equal to $1,000 or ($2,000 x (20,000/40,000)).

(4) For contributions made to a MSA under section 220 of the Internal Revenue Code, the deduction for Oregon is equal to the federal deduction times the ratio of Oregon compensation over compensation from all sources.

Or. Admin. R. 150-316-0197

9-22-86, 12-31-86, Renumbered from 150-316.127(1)(a)-(C); RD 7-1989, f. 12-18-89, cert. ef. 12-31-89; RD 5-1997, f. 12-12-97, cert. ef. 12-31-97; Renumbered from 150-316.130(3), REV 61-2016, f. 8-15-16, cert. ef. 9/1/2016

Stat. Auth.: ORS 305.100

Stats. Implemented: ORS 316.130