The Oregon Department of Revenue (ODR) has confirmed a tax surplus of more than $1.5 billion which enables a refund rate to be credited to taxpayers’ 2019 tax returns. The Oregon tax kicker rate will be 17.171% of the taxpayers’ 2018 taxes. Keep in mind that the tax is considered after the credit for taxes paid to other states. This year’s kicker is expected to be the largest in state history increasing nearly 10% from the previous two years. Instead of kicker checks, this year’s surplus will be returned to taxpayers through a credit on their 2019 state personal income tax returns filed in 2020.

The Oregon Department of Revenue will release a calculator in January 2020 to help taxpayers plan for this credit amount. In the meantime, Oregon residents can do the following to calculate their kicker credit amount:

1. Take the total taxes figure on line 22 of Oregon Form OR-40.
2. Subtract any credits claimed for taxes paid to other states on Oregon Form OR-ASC (Code: 802 or 815).
3. Multiply that amount by 17.171%.

To claim this refundable tax credit, you must file a 2019 Oregon tax return, even if you don’t have an Oregon tax filing requirement. Keep in mind that the state may use all or part of your kicker to pay any state debt you owe, such as taxes due for other years, child support, court fines or school loans. Visit the Oregon Department of Revenue’s website to get tax forms, check the status of your refund or make tax payments.

Our advisors are here to help guide you through how this tax refund may impact you. Here are a few possible outcomes. This Oregon tax kicker may:

• Reduce or eliminate your Q4 tax estimate requirement for Oregon
• Allow you to reduce your current withholdings on your paycheck
• Provide an opportunity to set aside funds for a financial goal

To learn more about the tax kicker and how it might affect you, please contact your Aldrich advisor. Constantly changing rules require a team who knows you, your business and the tax implications. Our professionals meet your needs while helping you manage tax risk, control costs and reap maximum benefit.

This article was originally published on October 18, 2019 with the kicker rate of 16%. It was updated on November 22, 2019 to reflect the new rate of 17.171%.

Aldrich CPAs + Advisors is a nationally ranked Top 100 accounting firm of advisors, independent Certified Public Accountants and business consultants. Serving clients throughout the US from locations in Oregon, California and Alaska, the members of the Aldrich team possess a combination of hands-on industry expertise, essential technical qualifications and certifications and a passion for helping clients achieve their goals.