OAR 150-316-0150: Separate or Joint Federal Returns for Spouses in a Marriage

(1) For tax years beginning on or after January 1, 1987, ORS 316.122 contains exceptions to the general rule that the filing status of the federal return, whether joint or separate, determines the filing status on the Oregon return. If a joint federal income tax return is filed and one or both of the spouses is not a full-year resident, each spouse must file a separate state return unless they elect to file a joint state return. (2) The income to be included by the spouses in computing their joint Oregon taxable income is determined as follows: (a) A full-year resident spouse shall include all income received during the year as determined in OAR 150-316-0060. (b) A part-year resident spouse shall include: (A) For the portion of the year the spouse is a resident all income as determined under OAR 150-316-0060. (B) For the portion of the year the spouse is a nonresident the Oregon source income as determined under ORS 316.127 and the rules thereunder. (c) A nonresident spouse shall include all Oregon source income as determined under ORS 316.127 and the rules thereunder. (d) The Oregon source net operating loss of a part-year resident included in the filing of a joint return is determined as follows: (A) For the portion of the year the spouse is a resident any loss determined under OAR 150-316-0035. (B) For the portion of the year the spouse is a nonresident any loss determined under OAR 150-316-0035 as it relates to nonresidents. (3) This election to file a joint state return may not be revoked after the due date of the return for the tax year. An amended return filed prior to the due date is considered an original return and may contain a change from a joint return to separate returns. (4) Spouses may change from separate state returns to a joint state return within the time prescribed by law for filing amended returns. The change to a joint return shall not be made if the change would not be allowable under Internal Revenue Code Section 6013(b). (5) In the event the election to file a joint return for Oregon tax purposes is not made, then each spouse with income subject to Oregon tax must compute an “as if” federal return on the basis of the separate federal adjusted gross income of the taxpayer. (6) If the taxpayers can clearly segregate their itemized deductions, each taxpayer may claim his or her own deductions instead of apportioning them by income. The burden of proof for substantiating the segregation rests with the taxpayer. See OAR 150-316-0555 for treatment of itemized deductions on separate returns when one spouse is not required to file in Oregon. (7) If a joint federal return has been filed, the federal tax deducted in arriving at Oregon taxable income on the separate state return shall be computed by apportioning the total accrued federal tax liability of both spouses. Apportionment shall be made on the basis of the separate federal adjusted gross incomes of both spouses. The result is subject to the $1,500 limitation of the federal tax deduction for each spouse for tax years beginning on or after January 1, 1987. See OAR 150-316-0535.