Difficulty of Care for State of Oregon

Forum|Forum|2 years ago
March 21, 2024
1 reply
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Hi,

I earned money caring for my son and it was exempt from Federal Taxes thanks to the Difficulty of Care exemption (https://www.irs.gov/individuals/certain-medicaid-waiver-payments-may-be-excludable-from-income)

However, it is still showing up as income in my state taxes and I was taxed on the money I earned. My state is Oregon and they don't tax that income for the same reasons as the federal income.

Anyway... anybody know how I can make this adjustment in Turbo Tax for my state and get a refund for the taxes I paid?

Thanks!

Michael

Michael

Best answer by KrisD15

Oregon starts with the federal taxable income.

Since it's not taxed on your federal return, it shouldn't be taxed on your state return.

If you reported Difficulty of Care income on the federal return, it should have been subtracted on Schedule 1 line 8s and flow to line your 1040 line 8.

Your taxable income is on your 1040 line 15, so the adjustment for the Difficulty of Care is already subtracted before the number Oregon uses.

For TurboTax Desktop, switch to Forms (top right)
To View using TurboTax Online:
Select Tax Tools on the left side-bar
Select Tools from that drop-down
Select “View Tax Summary” on the TOOLS CENTER screen
Select “Preview my 1040” which now appears on the left side-bar

KrisD15Answer

Oregon starts with the federal taxable income.

Since it's not taxed on your federal return, it shouldn't be taxed on your state return.

If you reported Difficulty of Care income on the federal return, it should have been subtracted on Schedule 1 line 8s and flow to line your 1040 line 8.

Your taxable income is on your 1040 line 15, so the adjustment for the Difficulty of Care is already subtracted before the number Oregon uses.

For TurboTax Desktop, switch to Forms (top right)
To View using TurboTax Online:
Select Tax Tools on the left side-bar
Select Tools from that drop-down
Select “View Tax Summary” on the TOOLS CENTER screen
Select “Preview my 1040” which now appears on the left side-bar

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michael140Author

Hi Kris,

Thank you for your help. I realize now I did not explain it well. Yeah, no worries about the income not counting for Federal and not being part of the State income. However, my employer withdrew taxes and sent them to the State of Oregon.

My question should really be: "Hey, my employer sent taxes to the State of Oregon for income that was covered under the Difficulty of Care exemption. How do I get that refunded?"

Any tips for that proper question?

Thanks,

Michael