PDF document

- 1 -

                        Multnomah County Preschool for All Personal Income Tax 
                                     2023 Form MC-40 Personal Income Tax Return Instructions 
                                                          Full Year Resident 
                                                                           
Important Information                                                     Individuals  Required  to  File  a  Full-Year  Multnomah 
                                                                          County Preschool for All (PFA) Tax Return. Every full-
                                                                          year resident of Multnomah County who is required to file 
Withholding Information.  If your employer withheld the                   an Oregon income tax return for the taxable year and who 
Multnomah County  tax from your wages, this will be                       reports Oregon  taxable  income  over $200,000 using 
reported in boxes 18, 19, and 20 of your W-2. To claim your 
                                                                          Oregon filing status married filing jointly, head of household, 
withholding credit, complete Schedule WH and submit a 
                                                                          or  qualifying  surviving  spouse,  or  over  $125,000  using 
copy of your W-2(s) with your return. Each W-2 may consist 
of multiple pages,  and local jurisdiction  information might             Oregon filing status single or married filing separately is 
not be reported on page 1 of your W-2 and may be reported                 required  to  file  a  Multnomah  County  full-year  personal 
on subsequent pages. Certain employers use “Total City” in                income tax return. 
Box 20 on page 1 of the W-2 to report the total of both the 
                                                                          Residency. You are a full-year Multnomah County resident 
Metro and Multnomah County                 jurisdictions. “Total City” is 
not equivalent to Multnomah County withholding, which will                if you live within Multnomah County for the entire year. You 
be reported with the locality name “MULT” in  Box 20 on                   are also a full-year Multnomah County resident, even if you 
subsequent pages. On Schedule  WH, report the values                      live outside of Multnomah County, if all of the following are 
from boxes 18 and 19 that correspond to where box 20 lists                true: you consider Multnomah County as your permanent 
“MULT” as the locality.                                                   home;  Multnomah County  is the center of your financial, 
                                                                          social, and family life; and Multnomah County is the place 
Failure to submit a copy of your W-2(s) or failure to respond             you intend to return after an absence. You are still a full-
to  our  requests  for  additional  documents  to  verify  W-2            year resident  if you  temporarily move out of  Multnomah 
information  may  mean  that  your  Multnomah  County                     County  or move back to  Multnomah County  after a 
withholding cannot  be verified. This may cause delays in                 temporary  absence.  An  individual  must  be  an  Oregon 
your return processing or removal of the withholding claim                resident for taxable  purposes to  be a Multnomah County 
from your return.                                                         resident. To determine if your place of residence is located 
                                                                          within the Multnomah County tax jurisdiction, utilize the tool 
Contact your employer to  request a corrected  W-2 if you                 available at portlandmaps.com to see if Multnomah County 
believe there are errors on your W-2.                                     is listed as the county jurisdiction where the address is 
                                                                          located. 
General           Information 
                                                                          Payment Deadline. The payment deadline for this return is 
File and Pay Online and Manage Your Tax Accounts at                       April 15, 2024. 
Pro.Portland.gov. Portland Revenue Online (PRO) allows 
you to:                                                                   Filing Deadline. The filing deadline for this return is April 
                                                                          15, 2024. 
 •           Register your personal and business tax accounts 
                                                                          Extensions.  Multnomah County  does not allow an 
 •           Update your account information 
                                                                          extension of time to pay your tax. The submission of an 
 •           File a personal tax return 
                                                                          extension payment by the original return due date provides 
 •           Make payments 
                                                                          an automatic six-month filing extension. If you do not have 
 •           Upload supporting tax pages and documents                    a tax balance due but would like to file an extension, your 
 •           View correspondence mailed to you                            federal and/or state extension will serve as your extension. 
 •           Provide Third-Party Access to your tax preparer              When filing your return on the extended due date, check the 
For  more  information  and  to  create  your  account,  visit            “Extension Filed” box on the return. If no extension payment 
Pro.Portland.gov.                                                         was made, please attach a copy of your federal extension 
                                                                          or verification of your Oregon extension payment with your 
Publication OR-17.  Multnomah County  personal income                     return. 
tax closely follows Oregon personal income tax treatment. 
See Publication OR-17 for more information about personal                 Amended Returns 
income tax laws. It is available at oregon.gov/dor/forms. To               
the  extent necessary, references in Publication OR-17 to                 The Revenue Division does not have a separate form for 
the state  of Oregon or  its  agencies should be treated as               amended tax returns. To amend your 2023 MC-40, use the 
references to Multnomah County and its agents.                            form for the tax year being amended  and check the 

Page  1of  ,72023 MC-40 Instructions (Rev. 01/29/2024)

- 2 -

Enlarge image

“Amended Return” box. If the address for the year you’re          Late Filing Penalty 
amending has changed, use your current mailing address             
and check the “Mailing Address Change” box.                       If you do not file your 2023 Form MC-40 by the original due 
                                                                  date, file an extension with the Revenue Division by the 
Fill in all amounts on your amended return, even if they are      original due date, or include a copy of your federal extension 
the same as originally filed. If you are amending to make a       with your return when you file by the extended due date, the 
change to additions, subtractions, or credits, include detail     following late filing penalties will be applied: 
of all items and amounts as well as any carryovers. Please         
include  a  statement  explaining  what  changed  from  the          • 5% of the amount of the unpaid tax if the failure to 
original return.  
                                                                       file is for a period less than four months. 
 
If you change taxable  income by  filing an original or              • An additional penalty of 100% of the unpaid tax of 
amended federal or Oregon income tax return, you must file             all tax years if the failure to file is for three or more 
an amended  Form  MC-40  within 60  days of when the                   consecutive tax years. 
original or amended federal or Oregon income tax return is         
filed. Include a copy of your original or amended federal or      No late filing penalty is due if a timely extension is filed with 
Oregon income tax return with your amended Form MC-40             the Revenue Division and a 2023 Form MC-40 is filed by 
and explain the adjustments made.                                 the extended due date, or a copy of the federal extension is 
                                                                  included  with the return and the  ‘Extension Filed’ box is 
On the  prepayments line  of your amended  Form  MC-40,           checked. 
enter the net tax as reflected on the original return or as          
previously adjusted. Do not include any penalty or interest 
portions of payments already made.                                Late Payment Penalty 
                                                                   
                                                                  Your 2023 income tax must be paid by April 15, 2024, even 
                                                                  if you requested  an extension to file your  personal tax 
Penalty Calculation                                               return. If you do not pay your tax by the original due date, 
 
                                                                  the following late payment penalties will be applied: 
You may be subject to penalties for underpaying your tax 
                                                                   
liability,  filing a late  personal income tax return, and/or 
                                                                     • 5% of the amount of the unpaid tax if the failure to 
paying your income tax liability after the original due date of 
                                                                       pay is for a period less than four months. 
the return.  
                                                                     • An additional penalty of 100% of the unpaid tax of 
 
                                                                       all tax years if the failure to pay is for three or more 
Although there is  a  late penalty for both failing to file  a 
                                                                       consecutive tax years. 
personal tax return by the due date and failing to pay the tax 
                                                                        
by the original due date of the return, only one of these late 
penalties will be applied, even if there is a failure of both 
                                                                  Interest Calculation 
requirements. In these cases, only the late filing penalty is      
applied. For the purposes of penalty calculations, unpaid tax     Calculate your interest from the original due date to the 15th 
is your tax liability reduced by  any  payment of tax  made       day of the month following the date of  the  payment.  The 
before the original due date and any credit against tax that      interest rate to use can be found in our Tax Administration 
is claimed on the return.                                         Policy – Personal Income Tax Interest Rates on Tax Due 
                                                                  and Refunds. 
Underpayment Penalty                                               
 
You may be subject to a penalty for underpaying your tax          Quarterly Underpayment Interest 
                                                                   
liability  if,  by the original  due  date of the return, timely  Quarterly underpayment  interest will be due if estimated 
payments are not made which are either:                           payments were required  and were  underpaid. Estimated 
                                                                  payments  can  be  made  through  quarterly  estimated 
 •           At least 90% of the total tax balance due, or        payments, employer-provided withholding  from  a filer’s 
 •           100% of the prior year’s tax liability  paid  by the wages, or a combination of both. Calculate your quarterly 
             original due date.                                   underpayment interest at the rate in effect for the tax year 
                                                                  from the due date of each quarterly estimated payment to 
                                                                  the original due date of the tax return to which the estimated 
If you did not satisfy either requirement, you will be charged 
                                                                  payments apply. The  amount of underpayment  is 
an underpayment penalty of 5% of the unpaid tax, but not 
                                                                  determined by comparing the 90% of the current total tax 
less than $5. 
                                                                  liability amount to quarterly estimated payments made prior 
                                                                  to the original due date of the tax return.   

Page  2of  ,72023 MC-40 Instructions (Rev. 01/29/2024)

- 3 -

Enlarge image

 There  is  no  interest  on  underpayment  of  quarterly           Required Multnomah County Business 
estimated payments if:                                              Tax Pages 
                                                                     
 •           The total tax liability of the prior tax year was less     •   FORM SP-2023 Business Tax Return for 
             than $1,000.                                                   Individuals – Multnomah County Business Income 
 •           An  amount equal  to  at least 90% of the total tax            Tax/City of Portland Business License Tax (if 
             liability for the current tax year was paid  in                Multnomah County previously taxed income 
             accordance with Section 11.548; or                             modification claimed for sole-proprietor or 
 •           An amount equal to at least 100% of the prior year's           disregarded entity business income) 
             total tax liability was paid in  accordance  with 
             Section 11.548.                                        Tax Return Filing Instructions 
                                                                     
                                                                    Rounding. Round off cents to whole dollars on your return 
                                                                    and schedules. To round, drop amounts under 50 cents and 
Federal, Oregon, and Multnomah County 
                                                                    increase amounts from 50 to 99 cents to the next dollar. For 
Business Tax Returns                                                example, $1.39 becomes $1 and $2.50 becomes $3. If two 
                                                                    or more amounts must be added to figure the amount to 
Please submit the following forms and schedules with your           enter on a line, include cents when adding the amounts and 
return. Without this information, we may disallow or adjust         round off only the total. 
items claimed on your MC-40 return. The list below is not all 
inclusive,  and  the Revenue Division  has the authority to         General Return Information 
request additional tax pages or supporting documentation             
to verify the accuracy of the tax reported on the tax return. 
                                                                    Multnomah County Preschool for All Personal Income 
                                                                    Tax  Account  #.  If  you  have  already  registered  for  an 
Required Supporting Oregon Tax Pages                                account  and know your  account number, enter your full 
 
Be sure to include the following Oregon tax pages and any           Multnomah County  PFA  Tax Account  number beginning 
associated statements when submitting your return:                  with MCP followed by ten digits. If you do not know your 
                                                                    number, leave field blank. 
 •           Form OR-40, pages 1-3 
                                                                    Filing Status. Check the box next to your filing status. You 
 •           Schedule OR-ASC (if filed) 
                                                                    must use the filing status corresponding with the filing status 
 •           Schedule OR-K-1(s) (if Multnomah County 
                                                                    used on your Oregon tax return.  Choose only one  filing 
             previously taxed income modification claimed) 
                                                                    status. 
              
Required Supporting Federal Tax Pages                               Taxpayer’s Last Name;  First  Name  and Initial. If filing 
                                                                    jointly, enter the last name, first name, and middle initial (if 
Be sure to include the following federal tax pages and any          applicable) of the taxpayer listed as the primary filer on the 
associated statements when submitting your return:                  Form OR-40. If taxpayer died during the tax year, check the 
                                                                    “deceased” box. A personal income tax return must be filed 
 •           Federal Form 1040, pages 1-2                           for a person  who  died if the person would  have  been 
 •           Form(s) W-2 (if Multnomah County PFA tax               required to file. If you have been  appointed personal 
             withheld)                                              representative or you have filed a small estate affidavit, sign 
 •           Federal Schedule 1                                     the return as “personal representative.” A surviving spouse 
 •           Schedule B (if filed)                                  must  sign  if  it’s  a  joint  return.  If  there  is  no  personal 
 •           Schedule C (if filed)                                  representative for the deceased person, only the surviving 
 •           Schedule D (if filed, including Form 4797, Form        spouse needs to sign a joint return. 
             6252, and Form 8824)  
                                                                    Spouse’s Last Name; First Name and Initial. If  filing 
 •           Schedule E (if filed) 
                                                                    jointly or as married filing separately, enter the last name, 
 •           Schedule F (if filed)                                  first name, and middle initial (if applicable) of the individual 
 •           Form 4868 (if federal extension filed)                 listed as the spouse on Form OR-40. If taxpayer died during 
 •           Form 1099-R (if PERS or federal retirement             the tax year, check the “deceased” box. A personal income 
             exemption claimed)                                     tax return must be filed for a person who died if the person 
 •           Schedule(s) K-1 (Form 1065/Form 1120-S/Form            would  have  been required to file.  If you have been 
             1041) (if Multnomah County previously taxed            appointed personal representative or you have filed a small 
             income modification claimed)                           estate affidavit, sign the return as “personal representative.” 
 •           Form 8582 (if passive activity loss limitations apply  A surviving spouse must sign if it’s a joint return. If there is 
             to Multnomah County pass-through loss 
             adjustment) 
Page  3of  ,72023 MC-40 Instructions (Rev. 01/29/2024)

- 4 -

Enlarge image

no personal representative for the deceased person, only Line 3. Previously Taxed Income Modification. If you
the surviving spouse needs to sign a joint return. received a Schedule K-1 (Form 1065) or a Schedule K-1
(Form 1120-S) from a pass-through entity (PTE) that was
Social Security Number. Enter the Social Security Number subject to the Multnomah County Business Income Tax
(SSN) or Individual Tax Identification Number (ITIN) of the (MCBIT), or if you have business income on your personal
corresponding taxpayer and spouse. Refunds will not be income tax return that was subject to the MCBIT, complete
issued without a valid SSN or ITIN. Schedule PTI on page 2 and report your modification from
line B-2 on line 3. Net pass-through gains will be reported
Residence Address. Enter the residential address. If the on this line as a negative value, and a net operating loss
primary taxpayer and spouse have different residential deduction will be reported on this line as a positive value.
addresses, list the address of the primary taxpayer. If the See instructions for Schedule PTI for additional guidance.
residential address has changed, list the current address
and mark the “check if changed” box. Unless a mailing Line 4. Multnomah County Income Exemption. If you use
address is provided, correspondence will be sent to the the single filing status of single or married filing separately,
residence address on file. enter $125,000 on line 4. If you use the joint filing status of
married filing jointly, head of household, or qualifying
Mailing Address. Only enter an address if the mailing surviving spouse, enter $200,000 on line 4. Enter as a
address is different from the residential address. If the negative number.
mailing address has changed, list the current address and
mark the “check if changed” box. Line 5. Income Subject to Tax. Enter the sum of line 1
through line 4 on line 5. If the balance is less than $0, enter
Initial Return Box. Check this box if this is your initial $0.
return, if your filing status changed from the previous year,
or if the person you are filing jointly with changed from the Line 5a. Tier 1 Taxable Income. Enter the balance of line
previous year. 5 on line 5a. This is the total amount of income that exceeds
the Multnomah County income exemption.
Final Return Box. Check this box if this is your final return.
Line 5b. Tier 2 Taxable Income. Enter the balance of line
Amended Return Box. Check this box if you are filing an 5 minus $125,000 if filing single or married filing separately,
amended return and have already submitted an original or line 5 minus $200,000 if filing married filing jointly, head
return. See the Amended Returns instructions above for of household, or qualifying surviving spouse, on line 5b.
more information about amending your MC-40. This is the total amount of income that exceeds $250,000 if
filing as single or married filing separately and $400,000 if
Extension Filed Box. Check this box If you have filed a
filing as married filing jointly, head of household, or
federal or state extension, or if you submitted an extension
qualifying surviving spouse.
payment by the original due date of the return. Include
required copies of federal or state extensions as applicable
(see “Extensions” under “General Information” for additional Part II – Multnomah County Preschool for
information). All Tax

Part I – Multnomah County Taxable Line 6. Tier 1 Tax. Multiply line 5a by 1.5% and enter on
Income line 6.

Line 7. Tier 2 Tax. Multiply line 5b by 1.5% and enter on
Line 1. Oregon Taxable Income. Enter your Oregon line 7.
Taxable Income from Form OR-40, line 19. You must attach
copies of the required Oregon and federal tax forms listed Line 8. Total Tax. Add line 6 and line 7 and enter on line 8.
in the instructions to your Multnomah County return. This is your total Multnomah County personal income tax
liability.
Line 2. Exempt Income. Oregon Public Employees
Retirement (PERS) benefits and federal retirement benefits, Line 9. Credit for Taxes Paid to Another State. A
including Federal Employees Retirement System (FERS) Multnomah County resident is allowed a credit for taxes
benefits, Civil Service Retirement System (CSRS) benefits, paid to another state on mutually taxed income if the other
and military retirement benefits, that are taxed by Oregon state does not allow the credit. This credit can only be taken
are exempt from this tax. Submit a copy of Form 1099-R for if the filer claims a credit for income taxes paid to another
each source claimed. You are only allowed a deduction for state on the filer’s Oregon income tax return or if a
income that was not already exempted on your federal or composite return was filed and there was no credit allowed
Oregon return. Enter as a negative number. on the other state’s return. A Multnomah County resident
figures the credit as the lesser of the Multnomah County tax
based on mutually taxed income or the tax actually paid to

Page 4of ,72023 MC-40 Instructions (Rev. 01/29/2024)

- 5 -

Enlarge image

the other state. To calculate the Multnomah County tax estimated payment to the next open tax year on this line.
based on mutually taxed income, see our Tax This election is irrevocable.
Administration Policy – Credit for Taxes Paid to Another
State. Line 16. Amount Due. If line 14 is positive, you have a
balance due. Pay by April 15, 2024, to avoid late payment
Enter the lesser of the Multnomah County tax based on penalties and interest. Make your check payable to
mutually taxed income or the tax actually paid to the other ‘Multnomah County PFA Tax’. For fastest payment
state on line 9. Enter as a negative number. processing, pay online at Pro.Portland.gov.

Line 10. Employer Withholding. If you had Multnomah
Part IV – Signature
County PFA tax withheld from your wages by your
employer, complete Schedule WH on page 2 and enter the
total tax withheld from line A-2 on line 8 as a negative Signature(s). Be sure to sign and date your return. If you
are filing a joint return, both taxpayers must sign. By signing
number. If you have tax to pay, consider submitting a FORM
the return, you acknowledge, under penalty of false
OPT to your employer to increase the amount your
swearing, that the information on the return is true, correct,
employer holds from your wages. For withholding
and complete.
information, go to: multco.us/finance/preschool-all-
personal-income-tax. Preparer Signature. Anyone who prepares, advises, or
assists in preparing personal income tax returns in
Line 11. Prepayments. Enter the total amount of
exchange for compensation of any kind must be licensed to
prepayments as a negative number. Include all quarterly
prepare Oregon returns and must sign the return.
estimated payments, extension payments, and any credits
carried forward from prior years.
Mailing Instructions

Line 12. Penalty. Enter all late penalties that apply, if
known. Leave blank if unknown or not applicable. If If you are including a payment with your return, send your
additional penalty is owed but was not calculated at the time completed return, payment, and all required supporting tax
of return submission, you will receive a bill by mail. pages to:

Line 13. Interest. Enter interest due on tax not paid by the Revenue Division – Multnomah County PFA Tax
due date, if known. Leave blank if unknown or not PO Box 9250
applicable. If additional interest is owed but was not Portland, OR 97207-9250
calculated at the time of return submission, you will receive
a bill by mail. Make the check payable to ‘Multnomah County PFA Tax.’
For fastest payment processing, pay online by logging into
Line 14. Balance Due or (Overpayment). Add lines 8
your PRO account at Pro.Portland.gov.
through 13 and enter the sum on line 14. If the sum is

negative, you have an overpayment for the year. If the sum
If a payment is not included with your return, send your
is positive, you have a balance due.
completed return and all required supporting tax pages to:

Part III – Tax Due / Refund Processing – Multnomah County PFA Tax

111 SW Columbia St, Suite 600
Line 15. Overpayment. If line 14 is negative, this is the Portland, OR 97201-5840
amount you have overpaid. If you have an overpayment,
you may make an irrevocable choice to have the balance
refunded to you or applied as an estimated payment to the Schedule WH – W-2 Withholding Summary
next open tax year. If no election is made, any overpayment for Multnomah County PFA Tax
will be refunded to you.

Line 15a. Refund. Enter the amount of the overpayment Use this schedule to calculate the total amount of
you would like refunded to you on this line. If you would like Multnomah County PFA tax that was withheld by your
direct deposit of your refund, you must file your return online employer. If your employer withheld the Multnomah County
PFA tax, information regarding the withholding will be
at Pro.Portland.gov. If your return is filed on paper, you will
shown in boxes 18, 19, and 20 of your W-2. Round off cents
receive your refund in the mail by check. This election is to whole dollars. If you have to add two or more amounts to
irrevocable. figure the amount to enter on a line, include cents when
Line 15b. Apply as an estimated tax payment. Enter the adding the amounts and round off only the total. If you file a
joint Multnomah County tax return, include information for
amount of the overpayment you would like to apply as an
both the primary filer and spouse on Schedule WH.

Page 5of ,72023 MC-40 Instructions (Rev. 01/29/2024)

- 6 -

Enlarge image

Only include box 18 and box 19 information if the locality in Income from Pass-Through Entity Subject
box 20 says “MULT”, “MultCo”, or “Multnomah County”. Do
to MCBIT
not include information for the locality of “Metro” or “Metro
SHS”. Information for Metro withholdings will be reported on You are allowed a deduction from personal taxable income
the Metro Personal Income Tax return, which is a separate for previously taxed income derived from a pass-through
form. If no Multnomah County PFA tax was withheld on your entity (PTE) subject to the MCBIT. To take this deduction,
behalf (or your spouse’s behalf, if filing jointly) by your you must have documentation from the PTE showing your
employer(s), you do not need to complete this schedule. share of income that was subject to tax on the business’s
MCBIT return. The deduction is limited to the amount of
Report each W-2 on a separate line. Round off cents to pass-through income, from the entity that paid the MCBIT,
whole dollars. If two or more amounts must be added to that is included in your federal Form 1040.
figure the amount to enter on a line, include cents when
adding the amounts and round off only the total. For more information related to this modification, please
read our Tax Administration Policy – Deduction for
Column (a). Employee SSN. Enter the social security Previously Taxed Income Received from a Pass-Through
number of the filer shown in box a of the W-2. Entity.

Column (b). Employer Name. Enter the name of the
employer shown in box c of the W-2. Losses from Pass-Through Entity Subject
to MCBIT
Column (c). Employer FEIN. Enter the employer
identification number (EIN) shown in box b of the W-2. Net operating losses generated in the current tax year at the
PTE level are allowed to be claimed at the individual level
Column (d). Local Wages, Tips, Etc. Enter the amount to the extent that the loss is allowed on the federal and
shown in box 18 of the W-2. Make sure that the locality Oregon return. A pass-through loss cannot exceed the
name shown in box 20 indicates that the value in box 18 is amount of pass-through loss included in Oregon taxable
for the Multnomah County PFA tax. income and cannot reduce your Multnomah County taxable
income to an amount below zero.
Column (e). Local Income Tax Withheld. Enter the
amount shown in box 19 of the W-2. Make sure that the If you claimed a net operating loss deduction on your federal
locality name shown in box 20 indicates that the value in Form 1040 that was from a carryforward of a net operating
loss from a year that the PTE was subject to the MCBIT, the
box 19 is for the Multnomah County PFA tax.
deduction is disallowed for purposes of the Multnomah
Check box if you have additional employer County PFA Personal Income Tax and must be added back
withholdings, and submit statement. If you have more to your Multnomah County taxable income. Include a
than four W-2s that show Multnomah County Tax statement explaining the adjustment.

withholdings, check the box, and attach a statement with the
For more information related to pass-through losses, please
employee SSN, employer name, employer FEIN, local
read our Tax Administration Policy – Net Operating Losses
wages, tips, etc. and local income tax withheld for each and Net Operating Loss Deduction from Pass-Through
additional W-2. Include the total amount from the statement Entities.
on line A-2.
Line A-2. Total sum from column (e). Enter the sum of all Schedule PTI Instructions

Multnomah County Tax withheld from column (e) and the
Report each PTE on a separate line. If income or loss flows
supplemental statement (if applicable). Enter the amount through one or more pass-through entities between the
from line A-2 on line 10, page 1 of the return. entity that paid tax and your federal return, adjustments may
be required. Submit a copy of the corresponding Schedule
Schedule PTI – Previously Taxed Income K-1 or SP-2023 for each modification claimed.
Modification
Column (a). Tax ID of Pass-Through Entity. Enter the S
corporation or partnership employer identification number
Use this schedule to determine the amount of previously
from box A of the Schedule K-1 or the social security
taxed income modification to report for pass-through
number of the sole proprietor who was liable for the MCBIT
income/loss that was already subject to the Multnomah
on business income tax reported on the personal income
County Business Income Tax (MCBIT). This schedule must
tax return.
be completed to determine the value for line 3 in Part I of

the return. If your pass-through income was not subject to
tax under the MCBIT for any reason, you are not eligible to Column (b). Name of Pass-Through Entity. Enter the
name of the S corporation or partnership from box B of the
claim a previously taxed income modification.
Schedule K-1 or the name of the sole proprietor.

Page 6of ,72023 MC-40 Instructions (Rev. 01/29/2024)

- 7 -

Enlarge image

Column (c). Income Subject to Tax from Pass-Through Column (e). Modifications Claimed for Previously Taxed
Entity. For the deduction for previously taxed income from Income and Losses. Multiply column (c) by column (d) and
a PTE subject to the MCBIT, enter the lesser of: enter the result. Enter deductions for income from a PTE’s
income subject to tax as a positive number. Enter losses as
• Multnomah County “income subject to tax” from the a negative number.
S corporation or partnership return that was
reported to you by the PTE with Schedule K-1 or Check box for an entity that elected the actual method
that is reported on line 20 of Form SP-2023 for previously taxed income. If one of the entities included
(Business Tax Return for Individuals – Multnomah on your Schedule PTI has elected the actual method for
County Business Income Tax/City of Portland allocating the maximum previously taxed income allowable,
Business License Tax), or check the box.
• The amount of pass-through income from the entity
that paid the MCBIT that is included in your federal Check box for additional previously taxed income
form 1040. modifications and statement. If you have previously taxed
income/loss from more than five PTEs to deduct or add-
For net operating loss deductions (NOLD) that must be back, check the box, and attach a statement which includes
added back, enter the amount of net operating loss the same information required above. Include the total
deduction allowed on your federal return from a pass- amount of additional modifications from the statement on
through entity or sole proprietor subject to the MCBIT. Enter line B-2.
a loss as a negative number.
Line B-2. Total sum from column (e). Enter the sum of all
Column (d). Ownership Percentage. If the amount eligible previously taxed income/loss from column (e) and
reported in column (c) was the entity’s “income subject to the supplemental statement (if applicable). Enter the
tax”, enter your ownership percentage in the PTE. amount from line B-2 on line 3, Part I of the return. If you
have a net loss, enter this as a positive number on line 3. If
If the amount reported in column (c) was the amount of you have a net gain, enter this as a negative number on line
pass-through income from the entity that paid the MCBIT 3.
that is included in your federal Form 1040, enter that entity’s
Multnomah County apportionment percentage as reported
on their Multnomah County Business Tax Return.

For a NOLD that must be added back, enter 100% as
1.00000.

Page 7of ,72023 MC-40 Instructions (Rev. 01/29/2024)

PDF file checksum: 1685589031

(Plugin #1/9.12/13.0)