How to Complete and File Form OR-OC: Schedules, Payments, and Deadlines

Oregon’s Form OR-OC composite return lets a pass-through entity file one Oregon income tax return and pay the tax for its nonresident owners who elect in, instead of each owner filing separately. S corporations, partnerships, and LLCs taxed as partnerships use it to report each participating owner’s share of Oregon-source income and remit the tax directly to the Oregon Department of Revenue. To complete it, you confirm which owners qualify and elect in, calculate each one’s Oregon tax on the appropriate schedule, and file the summary page with payment by the return’s due date.

Who Can Be Included

Participation is voluntary, and each owner’s election is irrevocable once the return is filed. Only certain owners qualify:

Individuals who were nonresidents of Oregon for the entire tax year.
Single-member LLCs that are disregarded and use a nonresident individual’s name and Social Security Number.
C corporations with no commercial domicile in Oregon whose distributive share is not required to be included in their own apportionable income. Assume a corporate owner’s share is apportionable unless the corporation gives you written confirmation otherwise.
Estates, trusts that are not Oregon resident trusts, and qualified funeral trusts under ORS 316.282.

Owners that are themselves pass-through entities cannot join.¹ An owner with other Oregon-source income can still participate; they just have to file their own Oregon nonresident return for the outside income and subtract what OR-OC already covered so nothing is taxed twice.²

What to Gather Before You Start

Pull this together for the entity and every electing owner before filling anything in:

Entity legal name, FEIN, Oregon business identification number, entity type, and tax year.
For each individual, estate, or trust owner: name, SSN or ITIN, mailing address, filing status (single, married filing separately, or joint, which determines the bracket table), ownership percentage, and Oregon-source distributive income.
For each C corporation owner: name, FEIN, tax type (excise or income), ownership percentage, and Oregon-source distributive income.
Any Oregon estimated tax payments the entity already made for the year on behalf of owners.

The tax runs off the Oregon-source portion of each owner’s distributive share, not the federal total. Both figures appear on the schedules, but clean apportionment is what keeps the numbers right. Getting the Oregon-source figure wrong is the most common source of errors.

Completing the Schedules and the Summary

Form OR-OC itself is a summary. The calculations live on the schedules, and which ones you need depends on who is participating.

Schedule OR-OC-1 for Individuals, Estates, and Trusts

List each nonresident individual, estate, and trust owner with their identification details, share of federal income, and share of Oregon-source distributive income. The schedule applies Oregon’s standard graduated personal income tax brackets, the same ones used on regular Oregon returns. Rates begin at 4.75 percent and reach 9.9 percent on income above $125,000 for single filers or $250,000 for joint filers. Each owner’s tax is computed separately based on filing status and income, then added up.³ The schedule also has columns for any PTE-E credit allocable to the owner and for interest on underpayment of estimated tax, plus credit for estimated payments the entity made during the year.

Schedule OR-OC-2 for C Corporation Owners

Corporate owners go on their own schedule because the rates differ. Multiply the first $1 million of each corporation’s Oregon-source distributive income by 6.6 percent and any amount above $1 million by 7.6 percent. Enter each corporate owner’s name, FEIN, tax type (excise or income), ownership percentage, and income figures individually. Send in the original schedule; the department does not accept photocopies.⁴

The Summary Page

Totals from OR-OC-1 and OR-OC-2 flow to the front of Form OR-OC. The schedule totals and the summary figures must match exactly, or you invite processing delays and notices. Recheck estimated payments and credits before finalizing. If the entity has centralized partnership audit regime (CPAR) adjustments to report, those go on Schedules OR-OC-3 (individuals and fiduciaries) and OR-OC-4 (C corporations).

Estimated Payments During the Year

The entity, not the individual owners, is responsible for estimated tax payments when the expected liability is large enough. For individual owners, interest on underpayment applies once an owner’s net tax exceeds $1,000 after credits and estimated payments. For corporate owners, the threshold is $500.³

Calendar-year filers whose electing owners are mostly individuals owe installments on April 15, June 15, September 15, and January 15 of the following year. When the majority of electing owners are corporate, the fourth installment shifts to December 15. Fiscal-year filers follow the same pattern based on the fourth, sixth, ninth, and thirteenth (or twelfth for corporate) month after the fiscal year begins. Estates and trusts owe no estimated payments; their tax is due when the return is filed.

Filing and Paying

The due date matches the due date of the federal and Oregon returns for the majority of electing owners. For most calendar-year filers, that is April 15. A federal extension automatically gives the entity six more months to file Form OR-OC.

You can file electronically through Oregon’s Revenue Online portal at revenueonline.dor.oregon.gov. If you file on paper, the mailing address depends on whether you owe:

Return with payment: Oregon Department of Revenue, PO Box 14555, Salem, OR 97309-0940. Do not include Form OR-OC-V; the voucher is only for standalone payments sent separately from the return.
Return with no payment (refund or zero balance): Oregon Department of Revenue, PO Box 14700, Salem, OR 97309-0930.

Use Form OR-OC-V when you need to mail a payment on its own, such as an estimated payment or a balance due after filing electronically. When you send the return and payment together by mail, just include the check.⁵

Late Filing and Payment

The entity, not the individual owners, is on the hook for penalties and interest. Oregon adds a 5 percent delinquency penalty on unpaid tax as of the due date. If the return remains unfiled more than three months past the due date or extended due date, a 20 percent failure-to-file penalty is added, bringing the total to 25 percent of the unpaid tax. The department can then issue a notice demanding the return within 30 days; ignoring it triggers another 25 percent penalty on any deficiency the department determines.⁶

Interest accrues daily on unpaid tax from the due date at the annual rate set under ORS 305.220, which changes periodically. Check the current rate in the OR-OC instructions or on the department’s website. If tax stays unpaid 60 days after the initial billing notice, the interest rate increases.

How OR-OC Relates to PTE-E and OR-19-AF

Filing Oregon’s Pass-Through Entity Elective (PTE-E) tax return does not replace Form OR-OC. If the entity has nonresident owners who elected into the composite return, you still file OR-OC for them. PTE-E credits allocable to a participating owner can be claimed on OR-OC, which lowers the composite tax owed. Overpayments on OR-OC, however, cannot be moved to the entity’s PTE-E account; the two are separate obligations.⁷

Form OR-19-AF is often confused with OR-OC but does the opposite job. A nonresident owner who is not joining the composite return signs OR-19-AF to promise they will file their own Oregon return and pay their own tax, so the entity does not have to withhold. OR-19-AF is an alternative to OR-OC, not part of it.⁸ For each nonresident owner, the entity has three paths: include them on OR-OC, collect a signed OR-19-AF, or withhold Oregon tax from their distributive share.

When a Participating Owner Still Files Separately

Joining the composite return does not always close out an owner’s Oregon obligations. An owner with Oregon-source income from outside the entity, such as another partnership, a rental, or another business, must file their own Oregon nonresident return for that outside income and subtract what OR-OC already reported.² An owner in more than one pass-through entity can join more than one composite return if they qualify for each. And any electing owner keeps the right to file their own nonresident return even for the income OR-OC covers, claiming a subtraction for the amount already reported through the composite.¹

1
Oregon Revised Statutes. Oregon Code 314.778 – Composite Returns of Pass-through Entities
2
Oregon Secretary of State. OAR 150-314-0515 – Oregon Composite Tax Return
3
Oregon Department of Revenue. Oregon Composite Return Instructions for Pass-through Entities
4
Oregon Department of Revenue. 2023 Schedule OR-OC-2 Oregon Composite Return Tax Calculation for C Corporation Owners
5
Oregon Department of Revenue. Form OR-OC-V Instructions Oregon Composite Return Payment Voucher
6
Oregon Revised Statutes. Oregon Code 314.400 – Penalty for Failure to File Report or Return or to Pay Tax
7
Oregon Department of Revenue. Pass-Through Entity Elective (PTE-E) Tax
8
Oregon Department of Revenue. 2024 Form OR-19-AF Instructions