Instructions for Form OR-65 — Oregon Partnership Return of Income (2025)

# Form OR-65 Instructions

Oregon Partnership Income Return

# Purpose of this form

Form OR-65 is an information return used to report Oregon modifications to federal taxable income and credits passed through to partners along with other information from the operation of a partnership. Generally, a partnership doesn't pay Oregon tax on its income, but if it conducts business activity in Oregon, it must pay the Oregon partnership minimum tax. Partners must include Oregon modifications and other partnership items on their Oregon tax returns.

# Which partnerships must file Form OR-65?

Every partnership that has:

Income or loss derived from or connected with sources in Oregon.
One or more Oregon resident partners.

Which partnerships don't need to file Form OR-65?

Publicly traded partnerships taxed as corporations.
Partnerships that aren't required to file a federal partnership return. For example, a married couple electing the qualified joint venture option isn't required to file a federal partnership return, so they don't need to file an Oregon partnership return.

# Partnership minimum tax

A partnership must pay the $150 minimum tax if it's doing business in Oregon and required to file a partnership return.
"Doing business" is performing a profit-seeking activity.
If the partnership is registered to do business in Oregon, but didn't have any business activity, it's not subject to the minimum tax.
When a short-year return is filed only because of a change in accounting periods allowed by the Internal Revenue Service (IRS), the tax is prorated for the number of months in the short tax year.

# Filing and payment deadlines

Returns and tax payments for the 2025 calendar year are due by March 16, 2026. Fiscal year returns are due by the 15th day of the third month after the end of the partnership's tax year.
If the 15th day of any calendar month falls on a Saturday, Sunday, or legal holiday, the return is due by the next business day. Estimated payments are not required.

# Penalty and interest

The partnership will owe interest on any tax not paid by the due date. The 2026 interest rate is 8 percent per year and increases to 12 percent per year if not paid within 60 days of our billing notice.
The partnership will also owe a 5 percent late payment penalty on any tax not paid by the due date.

# Partnership failure-to-file penalty

We may assess a penalty if a partnership doesn't file a return or fails to provide information to us as required by law. The penalty is $50 per month per partner for each month the return is late or incomplete, up to a maximum of five months.
Don't submit a penalty payment with the return. Penalty payments are only required if the department assesses a penalty.

# Extension of time to file

The extended due date is September 15, 2026, for calendaryear partnerships. For fiscal-year partnerships, the extended due date is six months after the original return due date. No request needs to be filed for an Oregon extension.
Note: An extension to file doesn't mean more time to pay.
For an extension of time to file Form OR-65:

Make your extension payment by the original return due date through Revenue Online, or mail your payment by check, money order, or cashier's check with a voucher, Form OR-65-V. With either payment option, select the "Original return or extension" payment type.
On Form OR-65, mark checkbox (f) and enter the extension due date.

# Short tax year

Oregon follows federal filing requirements for short tax years.
Use the 2025 form for a short tax year that ends in 2026, if the 2026 forms are not available by the due date. Don't cross out the year on the form. Instead, enter the beginning and ending dates for the short year and mark the "Short-year return" box.

# Guaranteed payments

are treated as distributive shares of partnership income. For nonresident partners, income attributable to Oregon sources is determined by applying the allocation and apportionment provisions to each nonresident's entire distributive share including guaranteed payments.

# Individual income tax returns

Each partner's distributive share of net income (or loss) and separately stated items must be reported on that partner's individual income tax return.

Partners report their share of Oregon modifications (additions or subtractions) or credits on their tax return. The partner's modification or credit is based on the total for the business multiplied by their ownership percentage.

# Nonresident partners

can join a composite return, Form
OR-OC, filed by the partnership or file their own return using Form OR-40-N and its instructions. The partnership is required to withhold tax payments on behalf of nonresident partners who are individuals or C corporations, unless the partner is exempt, files an affidavit stating that they will pay their own estimated tax, or joins a composite return. See Publication OR-OC and Form OR-19 Instructions for more information.

# Form instructions

Heading
Enter all information in the heading (including an assumed business name or other name that the partnership does business as, if any), and check all applicable boxes. It's important that you provide the name and contact information for the person who has the partnership records. If you don't complete this section, there may be a delay in receiving important information. If the partnership filed using a different name on the 2024 Oregon partnership return, check the "name change" box and provide that name.
Line instructions
Line 1A. Answer "Yes" if the partnership is doing business in Oregon. "Doing business" is defined the same for partnerships and corporations.
Lines 2A and 2B. The partnership is required to file if it had income or (loss) apportioned or allocated to Oregon or if it had Oregon resident partners. If you answered "Yes" to 2A or 2B (or both), you must file Form OR-65.
If you didn't answer "Yes" to either 2A or 2B, then the partnership isn't required to file a return or pay the minimum tax.
Line 3A. If 1A is "Yes" and 2A or 2B (or both 2A and 2B) are "Yes", the partnership owes the partnership minimum tax. Enter $150 on line 3A unless the partnership is filing a return for a change in accounting periods. If the "Accounting period change" box is checked, use this chart to determine the correct tax. Enter the tax on line 3A that corresponds to the number of months on the return:
Number of Tax Number of Tax months months
1 $ 13 7 $ 88
2 $ 25 8 $100
3 $ 38 9 $113
4 $ 50 10 $125
5 $ 63 11 $138
6 $ 75 12 $150
Important: This chart doesn't apply to other short tax year returns, such as initial returns or final returns. The tax is $150 in those cases.
Example 1: In 2025, the IRS gave Renters LLC permission to change from a calendar tax year to a fiscal tax year ending in September. To change the accounting periods, a short year return is required from January 1 to September 30, 2025. The LLC will file a 2025 short year return and owe $113 in tax on the due date for that short year, which is December 15, 2025. Later they will file a full year 2026 return from October 1, 2025, to September 30, 2026, and will owe $150 minimum tax for that full tax year.
Example 2: Freight Partners ended business on May 11, 2026.
They are a calendar tax year partnership, so the partners will file a 2026 short tax year return due August 17, 2026. They will use 2025 forms because 2026 forms aren't available yet, but they will follow 2026 tax laws when completing the return. They will owe $150 minimum tax which is also due August 17, 2026, even if they get an extension to file.
Line 3B. Enter the payments submitted prior to filing or with an extension.
Line 3C. If payments are less than the tax liability owed by the partnership, enter the amount of tax due (line 3A minus line 3B). Otherwise, go to line 3D.
Line 3D. If payments are more than the tax liability owed by the partnership, enter the amount to be refunded to the partnership (line 3B minus line 3A). If the tax liability and the payments already submitted are the same, enter $0.
Line 4D. Enter the number of federal Schedule K-1s that were issued to partners. Separately report the number of K-1s issued to resident and nonresident partners.
Line 4E. Enter the number of partners who elected to join in the Form OR-OC the partnership filed or will be filing.
Line 5C. If a federal audit or adjustment changed the partnership's prior year or current year tax return, check the box and list the tax years that were changed. See "Federal centralized partnership audits" and Publication OR-OC for additional information.
Line 5D. If the partnership didn't make the opt-out election for centralized audits, enter the contact information for the federal partnership representative (PR). If the PR is an entity, enter the contact information for both the designated individual and the entity.
Lines 7A-7D. The partners must file returns and pay transit district self-employment taxes for income subject to these taxes. The partnership may instead file and pay on their behalf.
Go to www.oregon.gov/dor/business for information.

# Schedule I

Enter the name, numeric code, and amount for each modification or credit. Include schedules to list additional modifications and credits or to explain the modifications. Modification and credit codes can be found in Publication OR-CODES and Publication OR-17, which are available on our website.

If the partnership is a member of another PTE that elected to pay Oregon's PTE-E tax, and the electing PTE claimed a deduction for the PTE-E tax on its federal return, an addition for the amount deducted must be reported on Schedule I.
See Form OR-21 Instructions or Publication OR-17 for more information.
A partner may be able to claim their share of these modifications or credits on their own return. Provide this information to partners with their Schedule OR-K-1. For more information, see the instructions regarding partnership and S corporation modifications and credits in Publication OR-17.
Oregon marijuana or psilocybin business modification.
Oregon-licensed marijuana and psilocybin businesses are allowed a subtraction for expenses that could be claimed as federal deductions if marijuana or psilocybin wasn't a controlled substance under federal law (IRC Section 280E).
To calculate the subtraction, complete an "as if" federal partnership return as if the business expenses would have been allowed for federal purposes. The subtraction is the difference between the profit/loss on the actual federal return and the "as if" return. Don't submit the "as if" return to the IRS or with Form OR-65. Keep it with the partnership's tax records. See "Subtractions" in Publication OR-17 for more information.
Gain on voluntary and involuntary conversions. Oregon allows partnerships to elect for their partners to defer the gain on voluntary and involuntary conversions. Partnerships must make the election for all consenting partners. Include Form OR-24 with Form OR-65 each year while the gain remains deferred, and check box (g) on the first page of the return.

# Filing the return

Submit this information with the return in the following order:

A copy of federal Form 1065. Include all pages and supporting schedules (for example, Schedule M-3).
Schedule OR-AP, if you answered yes to question 6A.
If this is the final partnership return, a schedule showing to whom all assets and liabilities were distributed, and each asset's adjusted basis, fair market value, and sales price.
Federal Schedules K-1, if there were fewer than 11 partners during the year. If the partnership had more than 10 partners, include a summary of partner information. The summary must include each partner's name, Social Security number (SSN) or federal employer identification number (FEIN), address, profit/loss sharing percentage, and Oregon modifications and credits.

If you are mailing the summaries and K-1s, we prefer them on
CD or a USB flashdrive. Label the CD or flashdrive with the entity's name, FEIN, and tax year. If your CD or flashdrive is password protected, mail the password separately or email it to files.partnership@dor.oregon.gov. Include the partnership name and FEIN with the password.

Form OR-24, if the partnership made a 1031 exchange investing in out-of-state property.
Any additional schedules required for Oregon modifications and credits from Schedule I.

Don't include Form OR-OC or Form OR-19 with the partnership return. File those forms separately.

# Payments

Pay the tax by the due date of the return (not including extensions) to avoid owing penalty and interest.
Online. You can make payments anytime at www.oregon. gov/dor.
By mail. Make your check, money order, or cashier's check payable to the Oregon Department of Revenue. Don't mail cash. Write "2025 Form OR-65," contact name, daytime phone, and the partnership's FEIN on the payment.

With Form OR-65: Send the payment in the same envelope with Form OR-65. Don't use a payment voucher.
Without Form OR-65: Use a payment voucher. See Form OR-65-V Instructions.

# File your return

You can electronically file or mail Form OR-65 and any required enclosures to:
Oregon Department of Revenue
PO Box 14555
Salem OR 97309-0940
If you are filing electronically and your software doesn't support attachments, mail the attachments to the address above or fax the attachments to 503-945-8735, labeled "Attn:
RRT." Be sure to provide the partnership name and FEIN for reference. Wait three days after electronically filing the return before faxing the required attachments.

# Amending instructions

Complete the return as it should have been filed and check the "Amended return" box at the top. Include an explanation of all corrections. There is no tax to pay or refund unless you change the amount entered on line 3C or 3D. If the amended return results in tax to pay, follow the payment instructions above.

# Federal centralized partnership audits

The IRS makes audit adjustments and collects taxes at the partnership level for partnerships subject to the centralized partnership audit regime (CPAR). CPAR adjustments that affect the partnership's Oregon income and taxes must be reported to us using the procedures outlined here.
Partnership representative. The federal partnership representative has the authority to make federal and Oregon decisions on behalf of the partnership, unless someone else is designated as the Oregon representative. Don't use Form OR-65 to designate an Oregon partnership representative.

Send us a letter with the representative's information by mail or fax, or submit it through Revenue Online.
Oregon CPAR election—Form OR-OC. The partnership representative must report the audit adjustments and may elect to pay Oregon tax at the partnership level. The representative must use Form OR-OC, not Form OR-65, for this report and to make this election. See Publication OR-OC for more details.
Amended Form OR-65. If the federal CPAR adjustments affect Oregon tax, and the partnership representative doesn't make the Oregon CPAR election, an amended Form OR-65 must be filed for each adjusted tax year. Complete a federal Form 1065 for each adjusted tax year as if the form were being filed with the IRS. Write "as if" at the top of each Form 1065, and submit the "as if" form with the amended Form OR-65 for each adjusted tax year.
Additional CPAR requirements. Partnerships with CPAR adjustments affecting Oregon tax must notify us by submitting a completed adjustments report, regardless of whether the Oregon CPAR election is made. Partnerships must also notify their owners of adjustments affecting Oregon income and whether the partnership has paid Oregon tax on that income. Partnerships can use federal Form 8986 for these notifications.
For more information about the Oregon election to pay the CPAR tax, see Publication OR-OC.
Do you have questions or need help? www.oregon.gov/dor 503-378-4988 or 800-356-4222 questions.dor@dor.oregon.gov Contact us for ADA accommodations or assistance in other languages.