How to Complete Oregon Form OR-40-P: Residency, Income Split, and Filing

Oregon Form OR-40-P is the part-year resident income tax return you file if you moved into or out of Oregon during the tax year. On it, you report everything you earned from all sources while you were an Oregon resident, plus any Oregon-source income from the part of the year you lived elsewhere.¹ The return is due April 15, 2026, for the 2025 tax year, and it uses a figure called the Oregon percentage to scale your tax and most credits to the share of your income tied to the state.

Who Has To File

You file OR-40-P if you changed your permanent home to or from Oregon during 2025 and your Oregon gross income is above the threshold for your filing status. For 2025, those thresholds are:²

Single: $2,835
Married filing jointly: $5,670
Married filing separately when your spouse claims the standard deduction: $2,835
Married filing separately when your spouse itemizes: $0
Head of household: $4,560
Qualifying surviving spouse: $5,670

For a part-year filer, Oregon gross income means everything you earned from any source while you were a resident, added to any income from Oregon sources during the months you lived somewhere else.² File even if you fall below the threshold when Oregon tax was withheld from your wages and you want it back, or when you qualify for a refundable credit.

Pin Down Your Residency Start and End Dates

Everything on OR-40-P depends on the exact dates you were an Oregon resident, and Oregon uses two independent tests to decide.³

The first is domicile: the place you treat as your permanent home and intend to return to. If you were domiciled in Oregon and then moved and established a new domicile elsewhere, your Oregon residency runs from January 1 through the day you left. If you moved in with the intent to stay, residency starts the day you arrived. Working in Oregon for a few months without putting down roots does not create a domicile.

The second is the 200-day test. If you aren’t domiciled here but maintain a permanent place of abode in the state and spend more than 200 days in Oregon during the year, you’re treated as a resident unless the stay was for a temporary purpose. Any part of a calendar day in Oregon counts as a full day.³

Getting the dates wrong can produce underpayment penalties or a bigger bill than you actually owe. The OR-40-P instructions include scenarios that walk through the harder domicile calls.

One boundary worth flagging: active-duty military members whose home of record in the Defense Finance and Accounting Service payroll system is outside Oregon are treated as nonresidents, and Oregon does not tax their military pay. A civilian spouse who moved here solely to be with the service member and kept a domicile in another state is likewise exempt from Oregon tax on wages under the Military Spouse Residency Relief Act.⁴

Split Your Income Between Oregon and Everywhere Else

Finish your federal Form 1040 first. Oregon starts from your federal adjusted gross income, and OR-40-P asks you to show your federal figures in one column and your Oregon figures in another.

Sort every income item by when and where you earned it. During your resident period, all income counts as Oregon income no matter where it came from. Outside that period, only Oregon-source income counts — wages for work physically done in the state, rent from Oregon property, a share of an Oregon business, and similar items.⁵

Watch the items that straddle your move. A sign-on bonus from a new Oregon employer, severance from the job you left behind, and stock options that vested around the move date all need to be assigned to the correct period. Income from a pass-through entity, like an S corporation or partnership, is prorated by the number of days you were a resident during the entity’s tax year rather than assigned entirely to one side.⁵ Mismatches here are what trigger manual review.

If you plan to claim additions, subtractions, or credits that don’t have their own line on OR-40-P, you’ll also need Schedule OR-ASC-NP, the adjustments schedule built for nonresident and part-year filers.⁶

How the Oregon Percentage Works

The Oregon percentage is the ratio that reduces your tax and most credits to the share connected to Oregon. In the standard case, divide line 34S (Oregon-column income after subtractions) by line 34F (federal-column income after subtractions), round to three decimal places, and enter it as a percentage. So 0.642 becomes 64.2%.²

Edge cases change the math. If your Oregon amount is larger than your federal amount, or your Oregon amount is positive while the federal figure is zero or negative, the percentage is 100%. If both numbers are negative, treat them as positive and compare; the instructions cover the exact handling.²

Once you have the percentage, multiply it by the tax calculated on your entire income. That gives Oregon the rate that matches your total earnings while charging only on the Oregon share. The same percentage prorates certain credits, flagged with a “PR” notation in Publication OR-CODES.

Standard Deduction, Subtractions, and Credits

Part-year filers can take Oregon’s standard deduction, but it gets prorated by the Oregon percentage. The 2025 full amounts are $2,835 for single or married filing separately, $5,670 for married filing jointly or a qualifying surviving spouse, and $4,560 for head of household. If your spouse itemizes on a separate return, your standard deduction drops to zero.⁷ Use the standard deduction only if it beats your Oregon itemized deductions.

A few items make a real difference to a part-year bill:

Social Security. Oregon doesn’t tax it. Whatever portion of your Social Security benefits landed in your federal adjusted gross income comes back out as a full subtraction on your Oregon return.⁷

Federal income tax liability. Oregon lets you subtract part of the federal income tax you owe, subject to dollar limits that vary by filing status. Publication OR-17 has the current caps under “Federal income tax liability.”⁷

Taxes paid to another state. If you paid income tax to another state on income Oregon is also taxing, claim the credit on Schedule OR-ASC-NP, Section E, using code 802. Use a separate line for each state. The credit only covers other-state income taxes; city, county, sales, and property taxes paid elsewhere don’t qualify.

Filing Your Return

The 2025 return is due April 15, 2026.⁸ Electronic filing is the fastest way through. Oregon’s free Direct File tool only supports the full-year resident Form OR-40, so OR-40-P filers need an approved third-party tax software product; the Department of Revenue keeps a list on its electronic filing page.⁹ E-filers who choose direct deposit typically see refunds within two weeks starting in mid-February.¹⁰

If you paper-file, the mailing address depends on whether you owe:

Owe tax: Oregon Department of Revenue, PO Box 14555, Salem, OR 97309-0940¹¹
Refund or zero balance: Oregon Department of Revenue, PO Box 14700, Salem, OR 97309-0930¹¹

Using the wrong PO box delays processing. Paper takes much longer either way; the department has said the first paper refunds for 2026 won’t go out until April.¹⁰

If You Need More Time

Oregon automatically honors a federal extension. File federal Form 4868 with the IRS, then check the “Extension filed” box when you eventually submit your OR-40-P — no separate Oregon extension request.¹² The extended filing deadline is October 15, 2026.

An extension only extends filing, not payment. Any tax you expect to owe must be paid by April 15, 2026, or interest and penalties start running. Pay electronically through Revenue Online by selecting “Return payment,” or mail a check with Form OR-40-V to the address on the voucher.¹²

What Late Filing Costs

Oregon’s penalty structure is separate from the federal one and can pile up fast. If you miss the deadline for filing or paying, the department adds a 5% delinquency penalty on the unpaid tax. Still not filed more than three months late? Add a 20% failure-to-file penalty. If the department then sends a written demand and you don’t file within 30 days, another 25% applies. The penalties stack, though the combined total can’t exceed 100% of the tax deficiency.¹³

Interest runs on top. For periods starting on or after January 1, 2026, the annual rate is 8%, with another 4% per year added if tax remains unpaid more than 60 days after assessment.¹⁴ Filing on time, or filing an extension and paying what you owe by April 15, avoids all of it.

Tracking Your Refund

Wait at least two weeks after filing, then use the “Where’s My Refund?” tool through Revenue Online. You’ll need your Social Security number or ITIN, your filing status, and the exact refund amount from line 71 of your OR-40-P.¹⁵

1
Oregon Department of Revenue. Personal Income Tax
2
Oregon Department of Revenue. 2025 Publication OR-40-NP, Oregon Income Tax Part-Year Resident and Nonresident Instructions
3
Oregon Revised Statutes. Oregon Code 316.027 – Resident Defined
4
Oregon Department of Revenue. Military Personnel
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Oregon Revised Statutes. Oregon Code 316.119 – Proration of Part-Year Resident’s Income Between Oregon Income and Other Income
6
Oregon Department of Revenue. 2025 Schedule OR-ASC-NP – Oregon Adjustments for Form OR-40-N and Form OR-40-P Filers
7
Oregon Department of Revenue. 2025 Publication OR-17, Oregon Individual Income Tax Guide
8
Oregon Department of Revenue. Newsroom – Department of Revenue
9
Oregon Department of Revenue. Direct File Oregon
10
Oregon Department of Revenue. Paper Return Processing Delays in 2026
11
Oregon Department of Revenue. Mailing Addresses
12
Oregon Department of Revenue. Apply for an Extension
13
Oregon Revised Statutes. Oregon Code 314.400 – Penalty for Failure to File Report or Return or to Pay Tax When Due; Interest; Limitation on Penalty
14
Oregon Department of Revenue. Penalties and Interest for Personal Income Tax
15
Oregon Department of Revenue. Where Is My Refund?