710:50-3-9 Amended Oklahoma return under federal claim of right adjustment

(a) Section 1341 of the Internal Revenue Code allows taxpayers who make repayments of income which were received under claim of right in a prior year to take a federal deduction or claim a federal tax credit for the taxable year in which the repayment was made. The Oklahoma Income Tax Code contains no parallel claim of right provision which would allow a credit or deduction in the year of repayment. [ See OTC Order No. 89-11-14-10 (Precedential) and OTC Order No. 91-02-22-013 (Precedential).] (b) If a taxpayer receives a credit under I.R.C. § 1341(a)(5) on its federal income tax return for the year in which the repayment was made, Oklahoma will recognize a recomputation of federal adjusted gross income for the year(s) the income was initially received under claim of right. This recomputation allows the taxpayer to amend its Oklahoma return(s) for the year(s) the income was initially received to exclude from federal adjusted gross income the amount of income repaid. Taxpayer must attach to its amended return(s) a claim of right worksheet showing the recomputation of adjusted gross income for the year(s) in which the income was initially received. [ See OTC Order No. 94-02-24-010.] (c) When a taxpayer's federal taxable income is recomputed for a prior year as described in (b) of this Section. an amended Oklahoma income tax return for the year(s) in which the income was initially received must be filed within one (1) year from the date the federal return claiming the Section 1341 credit was filed.