OAR 150-316-0605
Military Pay Subtraction

(1)

Definitions.

(a)

“Uniformed services” refers only to services under the orders of the President of the United States and means the commissioned corps of the National Oceanic and Atmospheric Administration (i.e., the Coast and Geodetic Survey) and the Public Health Service (regular and reserve), consistent with 10 USC § 101(a)(5)(B) and (5)(C). Other members of the National Oceanic and Atmospheric Administration and the Public Health Service, or members of these organizations not under the orders of the President, are not included in this definition and would not qualify for an Oregon military pay subtraction.

(b)

“Home of the taxpayer” is where the taxpayer does any of the following:

(A)

Maintains his or her primary residence;

(B)

Lives with his or her family; or

(C)

Incurs continuing living expenses, such as mortgage or rent, utilities, and real and personal property taxes and insurance.

(2)

Military pay subtraction. A member of the Armed Forces as defined in ORS Chapter 316 (Personal Income Tax) and this rule may subtract the following from their taxable military pay:

(a)

Year of entry-Year of discharge. Military pay earned for services performed outside of Oregon.

(A)

Year of discharge includes termination of full-time active duty from the Armed Forces of the United States.

(B)

Year of entry is for initial enlistment or draft and only allowed one time per taxpayer, but the subtraction for year of discharge is allowed each time a taxpayer is discharged.

(C)

The date of the enlistment order or date of discharge is the applicable tax year.
Example 1: Brian is domiciled in Oregon and remains domiciled in Oregon for all years relevant to this example. He enlists in the U.S. Army for the first time in 2004 and is stationed in California. In 2008, he is discharged and moves back to Oregon. The Army offers him a position in Portland, Oregon. He accepts the offer and reenlists shortly after the discharge. In 2012, Brian is reassigned to Florida. He plans to retire from the Army in 2024 and move back to Oregon. Brian will qualify for a subtraction of all military pay earned outside Oregon for tax year 2004 because that is his initial year of enlistment into the Armed Forces. He will also qualify for a subtraction for all of his military pay earned outside Oregon for tax years 2008 and 2024 because both years are treated as a year of discharge. From 2008 to 2012, he will qualify for a subtraction of $6,000 of his military pay while stationed in Oregon.
Example 2: Karen is domiciled in Oregon and remains domiciled in Oregon for all years relevant to this example. She enlists in the U.S. Navy in 2000 and is discharged in 2004 and returns to Oregon. Karen decides to reenlist in 2005 at which time she leaves Oregon and is assigned outside Oregon for the rest of her military career. In 2021, she retires from the Navy and returns to Oregon. Karen qualifies for a subtraction of military pay earned outside Oregon for tax year 2000 because that is her initial year of enlistment into the Armed Forces. She will also qualify for a subtraction for her military pay earned outside Oregon for tax years 2004 and 2021 because both years are treated as a year of discharge. Karen does not qualify for a subtraction for her military pay earned outside Oregon in 2005 under the year of entry or year of discharge rules because it was not her initial year of entry. However, she may subtract all of her military pay earned outside Oregon for that year under the subtraction for service performed outside of Oregon discussed in subsection (2)(b) of this rule.

(b)

Service outside Oregon. Military pay earned for service performed outside of Oregon from August 1, 1990, to the date set by the President as the end of combat activities in the Persian Gulf Desert Shield area can be subtracted (Executive Order 12744).
Example 3: Jan enlisted in the Air Force Reserves in 2010. She was called to active duty September 15, 2013, and shipped to Fort Lewis, Washington. She earned a total of $10,000 military pay in 2013. $2,000 was earned in Oregon before September 15. She qualifies to subtract her military pay earned outside Oregon after September 15. Jan also qualifies to subtract the remaining $2,000 because it is less than $6,000. Her military pay subtraction is $10,000.
Example 4: Mike enlisted in the Oregon Army National Guard in 2000. He was called to active duty on August 1, 2013 and assigned outside Oregon. He earned $15,000 in military pay -- $10,000 prior to August 1, and $5,000 after. Mike’s military pay subtraction for 2013 is $11,000 ($5,000 for service performed outside Oregon and up to $6,000 of his remaining military pay).

(c)

Reserve component members away from home overnight. The taxpayer is “away from home” when the taxpayer is required to stay in a temporary location that is not a home of the taxpayer and is not allowed to go home while at the temporary location. The pay earned while away from home for 21 days or longer may only be subtracted by someone who is a member of a reserve component; reserves or National Guard.
Example 5: Hallie is a member of the Army National Guard assigned to her unit in Medford and earned a total of $12,000 for the year. She was required to go on assignment to Umatilla from April 5 to June 23 and stayed overnight in that area. Hallie wasn’t authorized to go home during this time. She may subtract the $3,000 she earned during her assignment because she was away from home overnight for 21 days or longer. She may also subtract $6,000 of her remaining military pay.

(d)

Other military pay. Any taxable military pay that is not eligible for one of the above subtractions may be subtracted up to $6,000. The military pay subtraction may not exceed the taxable military pay on the return. If both taxpayers on a joint tax return are eligible for a military pay subtraction, each person’s subtraction is separately figured before adding them together to report on the return.
Example 6: Joe is a member of the Marine Corps and on active duty for all of 2013. He is domiciled and stationed in Oregon. He earned $25,000 of military pay during 2013. Joe’s military pay subtraction is $6,000.
Example 7: Mary and Clyde are married and both members of the Army National Guard. During 2013, Mary was stationed overseas on active duty for 10 months. She received $1,000 of military pay before she was deployed. During her deployment she received $28,000 and $15,000 of that was excluded from federal taxable income. Of the total $29,000 she made, she’s only reporting $14,000 as taxable income. She qualifies for a military pay subtraction of all $14,000; $13,000 of her taxable military pay was earned outside Oregon and the remaining taxable military pay is eligible as other military pay. Clyde remained in Oregon during 2013 and earned $10,000 of taxable military pay. He isn’t eligible for any of the subtractions allowed for certain situations, but he is eligible to subtract up to $6,000 of his taxable military pay. Together the subtraction on their joint Oregon tax return is $20,000; $14,000 is Mary’s and $6,000 is Clyde’s.

(3)

Combat zone benefits.

(a)

Additional time to file and pay. Members of the Armed Forces who served in a combat zone are allowed extra time to take care of their Oregon income tax matters. Taxpayers are allowed the statutory filing period of 3 months and 15 days following the close of the tax year plus at least 180 days after the later of:

(A)

The last day the person was in a combat zone (or the last day the area qualifies as a combat zone); or

(B)

The last day of any continuous qualified hospitalization for injury from service in the combat.

(b)

Eligible actions. The following are some of the income tax actions that can be extended:

(A)

Filing any return of income tax (except withholding taxes);

(B)

Paying any income tax (except withholding taxes);

(C)

Filing a petition with the Tax Court;

(D)

Filing a refund claim;

(E)

Collection of any income tax due by the Department of Revenue.

(c)

For purposes of this subsection (3), “income tax” includes the taxes imposed upon the income of estates and trusts and paid by the fiduciary thereof.
Example 8: Margaret entered Saudi Arabia on August 26, 2012. She remained there through March 16, 2013, when she departed for the United States. She was not injured and did not return to the combat zone. She has 285 days (180 plus 105) after her last day in the combat zone, March 16, to file her 2012 income tax return. The 105 additional days are the number of days in the three and a half month filing period that were left when she entered the combat zone (January 1–April 15). Margaret’s return is due by December 26, 2013.
Example 9: Leonard’s ship entered the Persian Gulf on January 5, 2013. On February 15, 2013, he was injured and flown to a U.S. hospital. Leonard remained in the hospital through April 21, 2013. He has 281 days (180 plus 101) after April 21, his last day in the hospital, to file his 2012 income tax return. The 101 additional days are the number of days in the three and a half month filing period that were left when he entered the combat zone (January 5–April 15). His 2012 return is due by January 27, 2014.

Source: Rule 150-316-0605 — Military Pay Subtraction, https://secure.­sos.­state.­or.­us/oard/view.­action?ruleNumber=150-316-0605.

150‑316‑0006
Application of Capital Losses and Capital Loss Carryforwards 150‑316‑0007
Policy — Application of Various Provisions of the Federal Internal Revenue Code 150‑316‑0009
Policy — Application of Various Provisions of Tax Law to Domestic Partners 150‑316‑0015
Adoption of Federal Law 150‑316‑0020
Tax Reform Act of 1984 Adjustments 150‑316‑0025
Definition: “Resident” 150‑316‑0027
Status of Individuals in a Foreign Country 150‑316‑0035
Oregon Net Operating Losses — Treatment After 1984 150‑316‑0040
Administrative and Judicial Interpretations 150‑316‑0043
Qualified Business Income Reduced Tax Rate (QBIRTR) 150‑316‑0045
Taxable Income of Nonresidents and Part-year Residents 150‑316‑0050
Farm Capital Gain 150‑316‑0055
Transitional Provision to Prevent Doubling Income or Deductions 150‑316‑0060
Taxable Income of Resident 150‑316‑0065
Social Security and Railroad Retirement Benefits Eligible for Subtraction 150‑316‑0080
Credit for Income Taxes Paid to Another State 150‑316‑0082
Credit for Taxes Paid to Another State When Paid by a Pass-Through Entity 150‑316‑0084
Credit for Income Taxes Paid to Another State — Computation 150‑316‑0086
Credit for Income Taxes Paid to Other States — Proof Required and Procedure for Obtaining the Credit 150‑316‑0088
Addition of Taxes Paid to Another State Claimed as an Itemized Deduction 150‑316‑0090
Credit for Duplicative State Taxation Relating to Different Years 150‑316‑0115
Disabled Child Exemption Credit 150‑316‑0120
Credit for Political Contributions 150‑316‑0125
Credit for the Gain on the Sale of a Residence Taxed by Another State 150‑316‑0130
Credit for Installation of Alternative Energy Devices 150‑316‑0135
Proration of Income and Deductions for Nonresidents and Part-Year Residents 150‑316‑0145
Proration for Pass-through Entity Income of Part Year Oregon Residents 150‑316‑0150
Separate or Joint Federal Returns for Spouses in a Marriage 150‑316‑0155
Nonresident Partners: Guaranteed Payments 150‑316‑0157
Nonresident Partners: Other Methods of Allocation and Apportionment 150‑316‑0165
Gross Income of Nonresidents 150‑316‑0167
Gross Income of Nonresidents 150‑316‑0169
Gross Income of Nonresidents 150‑316‑0171
Gross Income of Nonresidents 150‑316‑0173
Gross Income of Nonresidents 150‑316‑0175
Gross Income of Nonresidents 150‑316‑0179
Student Loan Interest Deduction — for Part-Year and Nonresidents 150‑316‑0181
Moving Expense Deduction — for Part-year and Nonresidents 150‑316‑0183
Gross Income of Nonresidents 150‑316‑0185
Gross Income of Nonresidents: Waterway Workers 150‑316‑0195
Alimony Deduction — for Part-Year and Nonresidents 150‑316‑0197
Nonresident Deduction for Contributions to IRA, Keogh, or Qualified Medical Savings Accounts 150‑316‑0205
Credit for Taxes Paid to State of Residence 150‑316‑0225
Retirement Income Credit 150‑316‑0230
Subtraction for Previously Taxed Contributions 150‑316‑0234
“Withholding Statement” and “Exemption Certificate” 150‑316‑0235
Withholding: Basis of Amount Withheld 150‑316‑0237
Employees Exempt from Withholding 150‑316‑0239
Withholding on Fringe Benefits 150‑316‑0241
Independent Contractor Definition 150‑316‑0243
Personal Liability of Responsible Officers, Members, or Employees for Taxes Withheld 150‑316‑0250
Bonding Requirements for Delinquent Withholding Employers 150‑316‑0255
Withholding by Employers 150‑316‑0257
Employer’s Election of Method of Computing Withholding 150‑316‑0265
Withholding Payments: Cash Basis 150‑316‑0267
Additional Time to File Reports 150‑316‑0275
Treatment of Payroll Based Program Overpayments 150‑316‑0282
Exemptions for Military Personnel 150‑316‑0284
Penalty 150‑316‑0290
Procedure for Correcting the Filing of Withholding Certificates 150‑316‑0295
Credit for Tax Withheld 150‑316‑0297
Where Taxpayer Reports on Fiscal Year Basis 150‑316‑0305
Withholding Income Taxes on IRAs, Annuities, and Compensation Plans 150‑316‑0307
Withholding Income Taxes on IRAs, Annuities, and Compensation Plans 150‑316‑0315
Alternative Withholding Payment Method for Employers to Avoid Undue Burden 150‑316‑0320
Voluntary Withholding for Retired Members of the Uniformed Services 150‑316‑0325
Voluntary Withholding for Civil Service Annuitants 150‑316‑0330
Semiannual Reports and Payments 150‑316‑0332
Withholding: Payment Due Dates 150‑316‑0334
Withholding Tax Payment Requirements for Agricultural Employers 150‑316‑0336
Employee’s Rights 150‑316‑0345
Requirement to use Electronic Funds Transfer 150‑316‑0347
Electronic Funds Transfer. Payroll taxes and corporation estimated income and excise taxes not combined in determining mandate. Payments to be included. 150‑316‑0355
Withholding: Payment and Reports 150‑316‑0357
Waiver of Termination Reports 150‑316‑0359
Withholding: Annual Report by Employer 150‑316‑0361
Combined Reports and Statewide Transit Tax Reports: Agricultural Employers 150‑316‑0370
Liability for Unpaid Withholdings 150‑316‑0372
Officer Liability: Joint Determination of Liability Conference 150‑316‑0380
Withholding Penalties 150‑316‑0385
Nonresident Alternate Filing 150‑316‑0390
Deductions Allowed on Either the Inheritance Tax Return or the Fiduciary Income Tax Return 150‑316‑0395
Tax Treatment of Unincorporated Organization 150‑316‑0400
Resident and Nonresident Estates and Trusts 150‑316‑0402
Oregon Qualified Trust Tax Return 150‑316‑0410
Fiduciary Adjustment 150‑316‑0415
Accumulation Distribution Credit for Oregon Taxes Paid by Trust During Income Accumulation Years 150‑316‑0420
Taxable Income of Nonresident Estate or Trust 150‑316‑0425
Oregon Multiple Funeral Trust Tax Return 150‑316‑0427
Persons Required to Make Returns 150‑316‑0435
Petitioning Department to Equally Split Joint Liability 150‑316‑0440
Innocent Spouse, Separation of Liability, and Equitable Relief Provisions 150‑316‑0445
Liability of Fiduciaries 150‑316‑0450
Decedent’s Estate: Request for a Final Tax Determination 150‑316‑0452
Decedents’ Estate: Application for Discharge from Personal Liability for Tax on Decedent’s Income 150‑316‑0465
Estimated Tax 150‑316‑0470
Allocation of Joint Estimated Tax Payments 150‑316‑0475
Estimated Tax: Farmer’s and Fisher’s 150‑316‑0480
Estimated Tax: Application of Prior Year Overpayment (Refund) 150‑316‑0485
Tax Used to Compute Underpayment of Estimated Tax 150‑316‑0487
Estimated Tax: Underpayment Interest Not Imposed if There is a Casualty, Disaster or Other Unusual Circumstances 150‑316‑0489
Estimated Tax: Underpayment Interest Not Imposed If There Is Reasonable Cause 150‑316‑0491
Estimated Tax: Partnership and S Corporation Income of Part-year Residents and Nonresidents 150‑316‑0493
Required Installments for Estimated Tax 150‑316‑0495
Estimated Tax: Joint Return to Single or Separate Return 150‑316‑0497
Estimated Tax: Single or Separate Returns to Joint Return 150‑316‑0505
Oregon Lottery Winnings and Losses 150‑316‑0507
Modification of Federal Taxable Income: Interest and Dividends 150‑316‑0509
U.S. Government Obligations 150‑316‑0511
Addition for Original Issue Discount (OID) 150‑316‑0513
Modification of Federal Taxable Income: Adding Interest or Dividends of the United States Exempted by Federal Income Tax Law 150‑316‑0515
Modification of Federal Taxable Income: Adding Federal Estate Tax Attributable to Income in Respect of a Decedent Not Taxable by Oregon 150‑316‑0519
Gain or Loss Upon the Sale of State and Municipal Bonds of Other States (Foreign States) 150‑316‑0525
U.S. Government Interest in Retirement Accounts 150‑316‑0530
Pool of Assets that Qualify to Pay State Exempt-Interest Dividends 150‑316‑0535
Federal Tax Deduction: Accrual Method of Accounting Required 150‑316‑0537
Adjustment of Federal Tax Liability 150‑316‑0545
Election to Include Child’s Unearned Income — Addition Required 150‑316‑0550
Special Oregon Medical Subtraction 150‑316‑0555
Modification of Federal Taxable Income: Itemized vs. Standard Deduction 150‑316‑0557
Modification of Federal Taxable Income: Oregon Income Tax Claimed as an Itemized Deduction 150‑316‑0559
Modification of Federal Taxable Income: Previously Taxed Contributions to Pension or Annuity 150‑316‑0565
Basis of Depreciable Assets Moved into Oregon 150‑316‑0567
Property Subject to Accelerated Cost Recovery System 150‑316‑0569
Adjustment to Income for Basis Differences 150‑316‑0575
Amount Specially Taxed Under Federal Law to Be Included in Computation of State Taxable Income: Accumulation Distributions 150‑316‑0580
Definition for Severely Disabled Exemption 150‑316‑0585
Exemption for Blind and Severely Disabled 150‑316‑0590
Substantiation for Permanently Severely Disabled 150‑316‑0595
Exempt Income of Native Americans 150‑316‑0600
Oregon Investment Advantage Apportionable Income Exemption 150‑316‑0605
Military Pay Subtraction 150‑316‑0607
First-time Home Buyer Savings Account 150‑316‑0610
Road Construction Worker’s Travel Expenses 150‑316‑0615
Substantiation Required for Construction Worker and Loggers Expenses 150‑316‑0625
(Miscellaneous) Valuation of Forest Land or “Farm Use” Land for Oregon Inheritance Tax Purposes 150‑316‑0630
Scholarship Awards used for Housing Expenses 150‑316‑0635
Subtraction for Land Contributed to Educational Institutions 150‑316‑0640
Subtraction for Qualified Investment of Severance Pay 150‑316‑0650
Waiver of Frivolous Return Penalty Imposed Under ORS 316.992 150‑316‑0652
Frivolous Return Penalty
Last Updated

Jun. 8, 2021

Rule 150-316-0605’s source at or​.us