The Oregon Special Medical Subtraction (Code 351) allows eligible taxpayers to reduce their Oregon taxable income by certain qualifying medical and dental expenses.
Eligibility Criteria
- Either the taxpayer or their spouse must have turned 66 by the end of the tax year.
- Federal AGI must not exceed $200,000 ($100,000 for single or married filing separately).
- Medical or dental expenses must qualify as medical or dental expenses that can be included in itemized deductions under federal rules. Refer to IRS Publication 502 for qualifying expenses.
- Expenses for individuals under age 66 are not eligible for this subtraction.
- The maximum subtraction per qualifying taxpayer is based on federal AGI. For 2025, the maximum allowable subtraction per qualifying taxpayer is $1,800, $1,400, or $1,000, depending on federal AGI and filing status. See Publication OR-17, Table 11, for the applicable limits.
- Expenses for dependents do not qualify, regardless of the dependent's age. Expenses that are deducted elsewhere on the return also cannot be included in the special medical subtraction.
Reporting Requirements
- Report the Special Oregon Medical Subtraction (Code 351) on Schedule OR-ASC, Section B if filing Form OR-40. If filing Form OR-40-P or Form OR-40-N, report the subtraction on Schedule OR-ASC-NP, Section C.
- Complete the required special Oregon medical subtraction worksheet to determine the allowable amount. Enter the calculated subtraction amount with Code 351 on the appropriate schedule.
Qualifying Expenses
- Medical or dental expenses qualify if they would be allowable as medical or dental expenses for federal itemized deduction purposes. Refer to IRS Publication 502 for qualifying expenses.
- The subtraction is available only for qualifying medical or dental expenses of you or your spouse. Expenses for dependents or individuals under age 66 do not qualify
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Disclaimer: Always verify details with the most current forms and instructions from the Oregon Department of Revenue and the IRS. For complex situations, consult a tax professional or attorney.