Oregon Tax Court Bars State From Using Social Security, Federal Interest in Tax Phase-Outs

The Oregon Tax Court, Regular Division granted the taxpayer’s motions for summary judgment and denied the Department of Revenue’s cross-motions, ruling that Oregon was prohibited from including social security benefits and interest on federal debt obligations in income thresholds used to phase out certain tax subtractions and credits. Taxpayer, a full-time Oregon resident, argued that including his federally taxable social security benefits and interest from federal debt obligations in his adjusted gross income for purposes of determining eligibility for Oregon tax benefits violated both state and federal law for tax years 2023 and 2024. The court found that using social ...