OR-PTE-PY: Schedule OR-PTE-PY, Qualified Business Income Reduced Tax Rate Schedule for Oregon Part-year Residents (2025)
Oregon · Oregon DOR · Used for tax years 2025
Schedule OR-PTE-PY is Oregon’s 2025 qualified business income reduced tax rate schedule for part-year residents. It reports qualifying business information and calculates tax to determine whether using the reduced rate is more beneficial.
Who files this form
Schedule OR-PTE-PY is for Oregon part-year residents seeking the qualified business income reduced tax rate for 2025. To qualify, you must complete both sections and submit the schedule with Oregon Form OR-40-P.
Section A covers qualifying sole proprietorships, S corporations, and partnerships. List only businesses that qualify. The form refers to instructions for more information about qualification, but those instructions are not provided here.
If Section A, line 7, is zero or less, you cannot use the reduced tax rate. Return to Form OR-40-P, line 44, and complete the rest of that form.
When it's due
For tax year 2025, the form lists these deadlines for amending a return to make or revoke the reduced-rate election:
- April 15, 2026: The original return due date.
- October 15, 2026: The deadline if filing an extension.
After your original return is filed, you can make or revoke the election only by filing an amended return on or before the applicable deadline. If you amend after the return's due date, including extensions, you must use the tax on Section B, line 16a, even if line 18a is less.
What you'll need
Have the following information ready to complete the schedule:
- Your name and Social Security number, plus your spouse's name and Social Security number if filing jointly.
- For each qualifying business: name, FEIN, business or NAICS code, number of qualifying employees, and entity type.
- Each qualifying business's nonpassive income or loss, Section 179 expense, and Oregon PTE-E tax deducted.
- Form OR-40-P amounts for Oregon taxable income on line 43, the Oregon percentage on line 35, and any depreciation addition on line 30F or subtraction on line 33F attributable to qualifying businesses.
The tax worksheet also directs you to the instructions for tax calculations, including Tax rate chart B. Those instructions are not provided here.
How to file
Submit the original Schedule OR-PTE-PY with your Oregon Form OR-40-P. Do not submit a photocopy. The supplied form does not give a mailing address or e-file directions.
- Complete Section A with only qualifying businesses. Total the fields and calculate line 7.
- If line 7 is more than zero, carry that amount to Section B, line 2b, and complete each applicable worksheet line.
- Enter the lesser of lines 16a and 18a on line 19a.
If line 16a is less than line 18a, enter line 19a on Form OR-40-P, both lines 44 and 45, and check box 44c. Do not multiply the tax by the Oregon percentage again on line 45.
If line 18a is less than line 16a, the reduced rate is not more beneficial. Enter Section B, line 17a, on Form OR-40-P, line 44, and complete the rest of the return.
Common mistakes
- Submitting a photocopy: The form requires the original schedule.
- Leaving out the schedule or a section: To qualify, complete both sections and include the schedule with Form OR-40-P.
- Listing nonqualifying businesses: Section A says to list only businesses that qualify.
- Using the reduced rate when Section A, line 7, is zero or less: The form says you cannot use it in that case.
- Entering negative amounts where prohibited: Section B, lines 3a, 5a, and 9b, must not be less than zero.
- Applying the Oregon percentage twice: When line 16a is less than line 18a, transfer line 19a to Form OR-40-P, lines 44 and 45, without multiplying by the Oregon percentage again.
- Changing the election too late: You cannot amend to make or revoke the election after the applicable due date.
Questions people ask
Which business types can I list?
Section A allows qualifying sole proprietorships (SP), S corporations (SC), and partnerships (P). List only businesses that qualify.
What happens if Section A, line 7, is zero or negative?
You cannot use the reduced tax rate. Return to Form OR-40-P, line 44, and complete the rest of the form.
Does the reduced rate always give me a lower tax?
No. If Section B, line 18a, is less than line 16a, the form says the reduced rate is not more beneficial. Enter line 17a on Form OR-40-P, line 44, and complete the rest of the return.
Can I change my election after filing?
For tax year 2025, you may amend to make or revoke the election on or before April 15, 2026, or October 15, 2026, if filing an extension. You cannot make or revoke the election after the applicable deadline.
Do I need to attach this schedule to my return?
Yes. Submit the original schedule with Oregon Form OR-40-P, not a photocopy.