Instructions for Form OR-41, 150-101-041 "Oregon Fiduciary Income Tax Return" - Oregon

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Download Instructions for Form OR-41, 150-101-041 "Oregon Fiduciary Income Tax Return" - Oregon

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The Oregon return filing and return payment due date for tax year 2019 is automatically extended from April 15, 2020 to July 15,
2020 for calendar year taxpayers. Visit www.oregon.gov/dor for updated information. Note: The body of these instructions has NOT
been updated with this information.
Form OR-41 Instructions
2019
Fiduciary Income Tax
This publication is a guide, not a complete statement, of Oregon Revised Statutes (ORS) and Oregon Department of Revenue
Administrative Rules (OAR). For more information, refer to the laws and rules at www.oregon.gov/dor.
New information
Looking ahead
Federal tax subtraction. ORS 316.695 limits the amount of
Short Line Railroad Rehabilitation tax credit
federal tax subtraction allowed based on the federal taxable
income of the trust. The allowable subtraction is between $0
The short line railroad rehabilitation tax credit is a new
and $6,800. See instructions for Schedule 2, line 8 for more
tax credit awarded for railroad rehabilitation. The credit is
information.
transferable and any unused portion may be carried for-
Kicker refund. Oregon’s surplus credit (known as the
ward up to 5 years. The credit is calculated as the least of:
“kicker”) is claimed as a refundable credit on your 2019 tax
• $1,000 per mile of a Tier 1 short line railroad owned by a
return. The credit is 17.171 percent of your 2018 tax liability
taxpayer,
from Form OR-41, line 10. You must file a 2019 return to
• $3,500 per mile of a Tier 2 short line railroad owned by a
claim your kicker credit, even if you don’t have an obliga-
taxpayer, or
tion to file. You may elect to donate your surplus credit to
• 50% of the short line railroad rehabilitation project costs
the Oregon State School Fund. See the instructions for line
paid or incurred by a taxpayer during the tax year in
18 for more information.
which the credit is claimed.
Credits extended to December 31, 2025:
The project must be certified through the Oregon Depart-
ment of Transportation. The tax credit applies to tax years
• Oregon Cultural Trust contribution (ORS 315.675) .......807
beginning on or after January 1, 2020, and before January 1,
• Agricultural workforce housing (ORS 315.164) .............835
2026. See Sections 6-17 of HB 2164 (2019).
• Crop donation (ORS 315.156) ............................................843
• Employer scholarship (ORS 315.237) ...............................847
• Mobile home park closure
Reminders
(note following ORS 316.116) ...............................................891
Oregon due date
Schedule OR-ASC-FID code changes
Generally, Form OR-41 is due by April 15, 2020 for 2019 cal-
New code numbers:
endar year taxpayers, excluding extensions. Fiscal year filers
• IRC section 139A federal subsidies for prescription
are due by the 15th day of the fourth month following the
drugs (ORS 316.837) ...........................................................123
close of the tax year.
• Oregon Investment Advantage (ORS 316.778) ...............342
Tie to federal tax law
Note: these code numbers are new for fiduciaries although
Oregon is tied to federal income tax laws as amended and
the modifications have been required previously using
in effect on December 31, 2018. Oregon exceptions to fed-
code numbers 199 and 399, respectively.
eral tax law:
Deleted code numbers:
• Contributions to renewable energy development
Contents
fund (ORS 315.326) .............................................................145
New information .............................................................1
• Repatriated foreign income (ORS 316.737) .....................184
Reminders ........................................................................1
• Discharge of indebtedness (ORS 316.739) ......................350
Filing requirements .........................................................3
• Alternative fuel vehicle fund (auction)
Residency definitions .....................................................3
(Note following ORS 315.336) ...........................................865
Extension of time for filing ............................................4
• Contributions of computers or scientific
Form OR-41 instructions ...............................................4
equipment (carryforward) (S corporations) ...................842
Schedule 1—Oregon changes .....................................7
Technical fix to correct code number:
Schedule 2—Fiduciary adjustment .............................8
Part-year resident and nonresident fiduciaries ...........9
• Agricultural workforce housing loans
Oregon-source income ...................................................9
(S corporation) (ORS 315.164) ............................................836
How to assemble the return ..........................................9
Is now:
Taxpayer assistance ....................................................... 10
Appendix A .................................................................... 11
• Agricultural workforce housing carryforward
(S corporation) (ORS 315.164) ............................................835
150-101-041-1 (Rev. 03-31-20)
1
www.oregon.gov/dor
The Oregon return filing and return payment due date for tax year 2019 is automatically extended from April 15, 2020 to July 15,
2020 for calendar year taxpayers. Visit www.oregon.gov/dor for updated information. Note: The body of these instructions has NOT
been updated with this information.
Form OR-41 Instructions
2019
Fiduciary Income Tax
This publication is a guide, not a complete statement, of Oregon Revised Statutes (ORS) and Oregon Department of Revenue
Administrative Rules (OAR). For more information, refer to the laws and rules at www.oregon.gov/dor.
New information
Looking ahead
Federal tax subtraction. ORS 316.695 limits the amount of
Short Line Railroad Rehabilitation tax credit
federal tax subtraction allowed based on the federal taxable
income of the trust. The allowable subtraction is between $0
The short line railroad rehabilitation tax credit is a new
and $6,800. See instructions for Schedule 2, line 8 for more
tax credit awarded for railroad rehabilitation. The credit is
information.
transferable and any unused portion may be carried for-
Kicker refund. Oregon’s surplus credit (known as the
ward up to 5 years. The credit is calculated as the least of:
“kicker”) is claimed as a refundable credit on your 2019 tax
• $1,000 per mile of a Tier 1 short line railroad owned by a
return. The credit is 17.171 percent of your 2018 tax liability
taxpayer,
from Form OR-41, line 10. You must file a 2019 return to
• $3,500 per mile of a Tier 2 short line railroad owned by a
claim your kicker credit, even if you don’t have an obliga-
taxpayer, or
tion to file. You may elect to donate your surplus credit to
• 50% of the short line railroad rehabilitation project costs
the Oregon State School Fund. See the instructions for line
paid or incurred by a taxpayer during the tax year in
18 for more information.
which the credit is claimed.
Credits extended to December 31, 2025:
The project must be certified through the Oregon Depart-
ment of Transportation. The tax credit applies to tax years
• Oregon Cultural Trust contribution (ORS 315.675) .......807
beginning on or after January 1, 2020, and before January 1,
• Agricultural workforce housing (ORS 315.164) .............835
2026. See Sections 6-17 of HB 2164 (2019).
• Crop donation (ORS 315.156) ............................................843
• Employer scholarship (ORS 315.237) ...............................847
• Mobile home park closure
Reminders
(note following ORS 316.116) ...............................................891
Oregon due date
Schedule OR-ASC-FID code changes
Generally, Form OR-41 is due by April 15, 2020 for 2019 cal-
New code numbers:
endar year taxpayers, excluding extensions. Fiscal year filers
• IRC section 139A federal subsidies for prescription
are due by the 15th day of the fourth month following the
drugs (ORS 316.837) ...........................................................123
close of the tax year.
• Oregon Investment Advantage (ORS 316.778) ...............342
Tie to federal tax law
Note: these code numbers are new for fiduciaries although
Oregon is tied to federal income tax laws as amended and
the modifications have been required previously using
in effect on December 31, 2018. Oregon exceptions to fed-
code numbers 199 and 399, respectively.
eral tax law:
Deleted code numbers:
• Contributions to renewable energy development
Contents
fund (ORS 315.326) .............................................................145
New information .............................................................1
• Repatriated foreign income (ORS 316.737) .....................184
Reminders ........................................................................1
• Discharge of indebtedness (ORS 316.739) ......................350
Filing requirements .........................................................3
• Alternative fuel vehicle fund (auction)
Residency definitions .....................................................3
(Note following ORS 315.336) ...........................................865
Extension of time for filing ............................................4
• Contributions of computers or scientific
Form OR-41 instructions ...............................................4
equipment (carryforward) (S corporations) ...................842
Schedule 1—Oregon changes .....................................7
Technical fix to correct code number:
Schedule 2—Fiduciary adjustment .............................8
Part-year resident and nonresident fiduciaries ...........9
• Agricultural workforce housing loans
Oregon-source income ...................................................9
(S corporation) (ORS 315.164) ............................................836
How to assemble the return ..........................................9
Is now:
Taxpayer assistance ....................................................... 10
Appendix A .................................................................... 11
• Agricultural workforce housing carryforward
(S corporation) (ORS 315.164) ............................................835
150-101-041-1 (Rev. 03-31-20)
1
www.oregon.gov/dor
• IRC Section 139A tax exemption for federal subsi dies for
applied to the IRS for the five-and-a-half month automatic
employer prescription drug plans. If you have this type of
extension to file (federal Form 7004), check the “Extension
business income, you’ll have an addition on your Oregon
to file” box on your Form OR-41. Oregon accepts a valid
return. Use addition code 123 on Schedule OR-ASC-FID.
federal extension.
• IRC Section 529 tax exemption for earnings on col lege
Payment. You may pay online at www.oregon.gov/dor or
savings plan funds used for K-12 tuition. Ore gon College
by mail. If by mail, send a completed Form OR-41-V and
& MFS 529 Savings Plans may be used for higher educa-
check or money order to:
tion expenses only. If previously subtracted contributions
are withdrawn and used for K-12 tuition, you’ll have an
Oregon Department of Revenue
addition on your Oregon return. Use addition code 117 on
PO Box 14110
Schedule OR-ASC-FID.
Salem OR 97309-0910
• IRC Section 199A deduction for noncorporate qual ified
Include on your check:
business income (QBID). Oregon is discon nected from
the QBID. If you have this type of deduction on your
• FEIN.
federal return, you’ll have an addition on your Oregon
• Tax year.
return. Use addition code 185 on Schedule OR-ASC-FID.
• Daytime phone.
Estates and trusts aren’t required to make estimated tax
Do you need a new FEIN (federal employer
payments to Oregon. Your full payment is due on the origi-
identification number)?
nal due date of the tax return, excluding extension.
Estates
Federal election. Oregon accepts the federal election made
You are required to obtain a new FEIN if any of the follow-
by the executor of an estate and the trustee of a qualified
ing statements are true:
revocable trust to treat the trust as part of the estate. Inter-
nal Revenue Code (IRC) Section 645.
• A trust is created with funds from the estate (not simply a
continuation of the estate).
If you made this election for your federal return, check the
• You represent an estate that operates a business after the
“A trust filing as an estate” box on Form OR-41, box A,
owner’s death.
and fill in the date of death. Include a copy of the required
federal Form 8855. Be sure to attach a copy of the death
You aren’t required to obtain a new FEIN if the following
certificate.
statement is true:
Confirmation of mailing. We can’t respond to requests for
• The administrator, personal representative, or executor
receipt of returns, extensions, or payments. If you want ver-
changes.
ification that your envelope reached us, send it by certified
mail.
Trusts
You are required to obtain a new FEIN if any of the follow-
Change of name or address. It’s important, if you change
ing statements are true:
the name or address of your trust or estate, to check the
appropriate box(es) on Form OR-41, page 1.
• One person is the grantor/maker of many trusts. Each
trust must have its own FEIN.
Deferral of gain. Did you file federal Form 8824 because you
• A trust changes to an estate.
are deferring gain on exchanged property? If so, check the
• A living or inter vivos trust changes to a testamentary
box on the front of Form OR-41, “Form OR-24 is included.”
trust.
Then complete and include Form OR-24 with the return.
• A revocable trust changes to an irrevocable trust.
In the year that the gain is finally recognized for federal
• A living trust terminates by distributing its property to a
purposes, you’ll need to file a return and report the portion
residual trust.
of the gain that is subject to Oregon taxation.
You aren’t required to obtain a new FEIN if any of the fol-
Capital gain on liquidated farm assets. A reduced tax rate
lowing statements are true:
is available if you sold or exchanged capital assets used in
• The trustee changes.
farming activities. The sale or exchange must represent a
• The grantor or beneficiary changes their name or address.
substantially complete termination of a farming business
you own. The sale can’t be to a family member. See instruc-
Note: If you need a new FEIN, apply for one with the Inter-
tions for Schedule 1, line 4. (ORS 316.045).
nal Revenue Service (IRS) by using federal Form SS-4. For
more information about a FEIN, see IRS Publication 1635,
Pass-through entity (PTE) reduced tax rate. ORS 316.043
available on the IRS website at www.irs.gov.
allows a taxpayer to claim a reduced tax rate for income
Extension of time to file. Oregon accepts the same automatic
from a PTE if certain conditions are met. See instructions
extension of time to file allowed by the IRS. If you timely
for lines 9 and Schedule 1, line 4.
150-101-041-1 (Rev. 03-31-20)
2
www.oregon.gov/dor
Section 685. A resident funeral trust is required to be
Filing requirements
established under the law of this state, or is established
by contract, for the funeral home or cemetery to provide
A fiduciary return must be filed for:
services or merchandise in Oregon.
• Resident estates or trusts required to file a federal Form
Name of executor or trustee. If there are co-fiduciaries,
1041 or 990-T.
enter the name and address of the one who signs the return.
• All resident estates and trusts upon termination are
Other returns required of fiduciaries. File the final appli-
required to report the final distribution to beneficiaries.
cable personal income tax return (Form OR-40, Form OR-
• Ancillary Oregon estates with federal gross income of
40-N, or Form OR-40-P) for a deceased taxpayer’s last tax
$600 or more for the tax year.
year, the year of death. If a federal Form 1040NR is required
• Nonresident estates with federal gross income of $600 or
for a nonresident beneficiary, a Form OR-40-N, may be
more from Oregon sources for the tax year.
required. If a federal return is required for a minor, incom-
• All estates that want to establish a fiscal tax year, even if
petent person, missing person, or conservatee, an Oregon
the estate had less than $600 of federal gross income for
return must be filed. If a person who is incompetent or is
the tax year.
now deceased failed to file a prior year individual income
• Part-year resident trusts with federal gross income of
tax return as required, the trustee is required to file the
$600 or more from Oregon sources for the tax year.
return. If you filed a federal Form 1040NR for a nonresident
• Nonresident trusts with federal gross income of $600 or
trust, you must file an Oregon Form OR-41 to report the
more from Oregon sources for the tax year.
income.
If you’re a nonresident estate or trust and the only Oregon-
If you’re an executor/personal representative of an estate,
source income you had for the tax year has been included
you may be required to file an Estate Transfer Tax return
in a composite filing by a pass-through entity, you’re not
(Form OR-706). If a decedent has a gross estate of $1,000,000
required to file an OR-41.
or more and the estate contains any Oregon property, the
Note: If you had a tax liability in 2018 on Form OR-41,
estate is required to file an Oregon Estate Transfer Tax
line 10, you need to file a 2019 return to claim your sur-
return.
plus refund (kicker) credit, even if you don’t meet the filing
If Form 5227 or Form 1041-A is required for federal income
requirements.
tax purposes, only file a copy of that form with us if there
is tax due to Oregon. File a Form OR-41 and include a copy
Residency definitions
of the Form 5227.
If you file federal Form 990-T and you’re a corporation, file
• Estates. An estate is an Oregon resident if the personal
Form OR-20. If a federal Form 990-T is filed, also file Oregon
representative is appointed by an Oregon court, or if the
Form OR-41 for your trust. Don’t complete Form OR-41,
estate administration is in Oregon. All other estates are
lines 1, 2, 5, 5a, and 6. From Form 990-T, enter any unrelated
nonresidents. An estate can’t be a part-year resident.
business taxable income on Form OR-41, Schedule 1, line
• Trusts. A trust is a resident if the trustee is an Oregon resi-
2, and the fiduciary adjustment on line 5b. Also complete
dent or if the trust administration is in Oregon. If there
Form OR-41, Schedule 1 and Schedule 2, column B.
are several trustees and one is an Oregon resident, the
Your original due date for federal Form 990-T is the 15th
trust is an Oregon resident trust. A trust can be a part-
day of the 5th month after the end of your tax year. Exam-
year resident if a trustee moves in or out of Oregon dur-
ple: Your organization year end is December 31, 2019.
ing the tax year. See part-year resident instructions below.
Your original due date for federal Form 990-T is May 15,
• Interstate trust administration. If the trustee is a cor-
2020. At the top of Form OR-41 write, “Original due date
porate fiduciary engaged in interstate trust administra-
May 15, 2020.”
tion, the trust is considered to be a resident of Oregon
Bankruptcy estates. Your return will consist of Oregon
and the place of administration for that trust is consid-
Forms OR-41 and OR-40, and copies of your federal Forms
ered to be Oregon if the trustee conducts the major part of
1041 and 1040. Oregon Form OR-41 is used only as a trans-
its administration of the trust in Oregon. In this context,
mittal for Form OR-40. Enter the tax amount computed on
“administration” relates to fiduciary decision making of
Form OR-40 on Form OR-41, line 8. If you request a prompt
the trust and not to the incidental execution of such deci-
determination (aka: rapid audit), send your written request
sions. Incidental functions include, but are not limited
separate from Form OR-41.
to, preparing tax returns, executing investment trades as
directed by account officers and portfolio managers, pre-
Period covered by the return. The return must be for the
paring and mailing trust accountings, and issuing dis-
same tax year used for filing the federal return. Trusts are
bursements from trust accounts as directed by account
required to file on a calendar year.
officers. [OAR 150-316-0400(5)].
When and where to file the return. All trust and estate
• Funeral trust. A resident funeral trust is a qualified
returns filing for the 2019 calendar year are due by April
15, 2020. Estate returns for other tax periods, fiscal year or
funeral trust (QFT) that has the meaning given in IRC
150-101-041-1 (Rev. 03-31-20)
3
www.oregon.gov/dor
Returns for estates and complex trusts. On Oregon Form
short period, are due by the 15th day of the fourth month
OR-41, lines 1 through 7, allocate the income and Oregon
following the close of the estate’s year. Example: Your estate
modifications between the estate or trust and the benefi-
is on a fiscal year starting June 1, 2019 and ending May 31,
ciary if an authorized distribution was made or required
2020. The 2019 Form OR-41 is due by September 16, 2020.
during the tax year. The fiduciary must provide the benefi-
Mail the return to:
ciary with income distribution and Schedule K-1 on federal
Oregon Department of Revenue
Form 1041. Include a copy of each K-1 with Form OR-41.
PO Box 14110
See instructions for line 6.
Salem OR 97309-0910
Transferee. The money and property of a taxpayer who has
Signature. The fiduciary or officer representing the fidu-
died passes to a person, estate, or trust, called the trans-
ciary must sign the return and provide the fiduciary’s
feree. The transferee may be liable for the obligations and
liabilities of the deceased person. The liability includes tax,
phone number.
interest, and penalty. The transferee’s liability is limited to
Accounting period. The accounting period must be the
the value of the property acquired from the decedent (ORS
same as for federal income tax purposes. Show the same
314.310).
accounting period on your Form OR-41-V and your Form
OR-41.
Extension of time for filing
Accounting method. The accounting method must be the
same as for federal income tax purposes. If the method is
The extension of time to file a fiduciary tax return is five-
and-a-half months.
changed, adjustments must be made to avoid duplication
or omission of income and deductions.
If you need more time to file, send your payment, federal
Form 7004, and Form OR-41-V to:
Amended return. If you need to amend your tax return,
use the Form OR-41 for the specific tax year. Check the
Oregon Department of Revenue
“Amended” box on the front of the return. Include a com-
PO Box 14110
plete narrative explanation for the changes, a complete
Salem OR 97309-0910
copy of the amended federal Form 1041, and all supporting
If you make a payment, check the “Extension payment”
documents.
box on the Form OR-41-V. If you aren’t making an Oregon
Unused loss carryovers. IRC Sections 172 and 1212 apply to
payment, complete and file the federal extension Form
7004 with the IRS. Keep a copy of your complete federal
an estate or trust and the beneficiaries. Include a copy of the
extension form. Check the “Extension to file” box on Form
federal loss carryover schedule with Form OR-41.
OR-41, page 1, and include a copy of the Form 7004 with
Income taxable to the grantor or substantial owner. Any
the return.
part of trust income taxable to the grantor or another per-
An extension of time to file your return isn’t an extension
son under IRC Sections 671 through 678 isn’t taxed on a
of time to pay your tax. All tax due must be paid by the
fiduciary return. However, the income information must
original due date of the return to avoid penalties.
be shown on Schedule OR-ASC-FID and be included with
Form 1041. Include this schedule with Form OR-41 to
When you file your return
show Oregon additions and subtractions to federal taxable
income. If the grantor trust is exempt from filing Form 1041
• If applicable, check the box on the front of Form OR-41
under IRC regulation 1.671-4, it’s also exempt from filing
indicating “Extension to file.”
Form OR-41 (OAR 150-316-0445).
• Include the amount you paid with Form OR-41-V, on line 17.
Form OR-41 line instructions
Please note: Complete this form by beginning on page 3,
should be 12.3456 percent. The computed percentage can’t
schedule 1.
be greater than 100 percent.
Simple trusts without capital gains or losses, or estates ter-
Line 5a. Enter the fiduciary adjustment allocable to the
minating in this tax year, must complete Form OR-41, lines
beneficiary. The number entered is a positive whole num-
2, 5a, and 6 on the front, and Schedules 1 and 2, lines 1–19
ber. (ORS 316.287 and OAR 150-316-0410.) If the adjust-
on page 3.
ment is a subtraction, the beneficiary’s share is limited to
If there are no distributions to the beneficiary, begin on line
an amount equal to the distribution of income taxable on
4. If no distributions were made to beneficiaries, the fidu-
the beneficiary’s individual return. A fiduciary adjustment
ciary adjustment on line 5 should be carried over to line 5b.
addition increases the beneficiary’s income. The benefi-
Line 3. Percentage. When computing the percentage, round
ciary’s share of the addition is limited as follows: Subtract
to four decimal places. For example, 12.34558 percent
the taxable portion of the distribution from the total amount
150-101-041-1 (Rev. 03-31-20)
4
www.oregon.gov/dor
of the distribution. The balance is the beneficiary’s share,
Note: If you enter an amount on line 9, you should also have
unless the amount of the addition is smaller.
an amount entered on schedule 1, line 3.
Any amount of a fiduciary adjustment not allocable to a ben-
Credits
eficiary is an adjustment to the fiduciary’s taxable income.
Check the appropriate box to indicate whether it’s an addi-
Note: Refer to Publication OR-17 or Oregon statutes for
tion or a subtraction.
additional information about credits.
Line 6. A copy of federal Form 1041, Schedule K-1 or an
All credit codes are separated into three categories: stan-
acceptable substitute, for each beneficiary, must be filed
dard credits, carryforward credits, and refundable credits.
with Form OR-41. The total of the income and Oregon fidu-
ciary adjustment reported on all Schedules K-1 must equal
Standard credits are nonrefundable credits that can only be
the amount entered on line 6. Each beneficiary’s share of
claimed on the current year’s tax return. Credit amounts
the fiduciary adjustment must either be shown at the bot-
awarded and not used in the current tax year will be lost.
tom of their K-1 on a blank line or on a separate sheet
included with the K-1. Mark it “Oregon fiduciary addition
Carryforward credits are nonrefundable credits for which
(or subtraction)” and write in the amount the beneficiary is
any unused portion in the current tax year may be carried
to report. Don’t break the fiduciary adjustment down into
forward to the following tax year. The number of years
separate components.
that a credit can be carried forward varies according to the
carryforward rules of the credit.
Example: An Oregon fiduciary adjustment includes a
$3,300 federal tax subtraction, a $600 U.S. government
If you have both standard credits and carryforward credits,
interest subtraction, and a $1,300 Oregon tax addition. The
standard credits should be used first so they aren’t lost.
amount reported to the beneficiary is an Oregon fiduciary
adjustment subtraction of $2,600.
Refundable credits can only be claimed on your current
year’s tax return; however, any amount that is more than
If you have a capital gain which isn’t distributed to the ben-
your tax will be refunded to you.
eficiaries, line 2 plus line 5a won’t equal line 6. Include a
statement with your return and explain there is an undis-
Line 11. Standard tax credits. Use Schedule OR-ASC-FID,
tributed capital gain on Form 1041, Schedule B, line 6.
Section 3, to report the amount and description of any stan-
Line 8. Tax. Use the rate schedule on Form OR-41, page 3,
dard credits claimed. See Appendix A for a list of avail-
to figure the tax.
able credits. The total of all standard credits from Schedule
OR-ASC-FID, Section 3, is entered on Form OR-41, line 11.
Line 9. Reduced-rate tax amount and qualifying source(s).
Don’t include payments or claim of right credit on line 11.
If you qualify for a reduced tax rate for net long-term capital
gain (NLTCG) under ORS 316.045, see Worksheet OR-FCG
Common standard credits include:
at www.oregon.gov/dor/forms. This worksheet is for refer-
ence only; do not attach to Form OR-41.
Credit for income taxes paid to another state
To claim the reduced tax rate, you must check the NLTCG
[Code 802] (ORS 316.082, 316.131, 316.292).
box on Form OR-41, line 9. Enter the amount you have com-
puted and attach an explanation of how you computed the
Resident estates and trusts. Generally, you can claim this
tax on your return. Name your attachment “FID Reduced
credit if the estate or trust has income that is taxed by both
Tax Rate Schedule.”
Oregon and another state. An Oregon resident trust that
If you qualify for a reduced tax rate for qualifying income
has income taxed by Arizona, California, Indiana, or Vir-
under ORS 316.043 from a partnership or an S corporation,
ginia may not claim the credit on the Oregon return. The
you may elect to use a reduced tax rate for PTE income. The
credit should be claimed on the nonresident return for that
reduced tax rate can be claimed for qualifying income up to
state. If the trust is a resident of Oregon and also a resident
$5 million. This election is irrevocable. To determine if you
of another state, the credit may be claimed on the Oregon
qualify, refer to the instructions for Schedule OR-PTE-FY.
return. Include a copy of the return you filed with the other
This schedule is for reference only; do not attach it to Form
state and proof of payment of the tax. No credit is allowed
OR-41.
if the tax has been claimed as a deduction. If a deduction
To claim the reduced tax rate, you must check the PTE box
for the other state’s tax was claimed on Form 1041, it must
on Form OR-41, line 9. Enter the amount you have com-
be added to income on Oregon Form OR-41, Schedule 2,
puted and attach an explanation of how you computed the
line 17.
tax on your return. Name your attachment “FID Reduced
How much is the credit? Your credit is the smallest of:
Tax Rate Schedule.”
• Your Oregon tax after all other credits, or
If you qualify for more than one of these reduced tax
• The tax you actually paid to the other state, or
rates, add the total tax from each source and report it all
on this line.
• The amount figured using the formula below.
150-101-041-1 (Rev. 03-31-20)
5
www.oregon.gov/dor
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