On October 9, the Oregon Department of Revenue confirmed Oregon taxpayers will receive part of a record-breaking $5.6 billion kicker state tax credit in 2024 when they file their 2023 state personal income tax return.
What is the Oregon Tax Kicker?
The Oregon Tax Kicker is a unique tax refund program designed to return excess revenue to Oregon taxpayers when the state collects more income tax revenue than expected. It is essentially a ‘kicker’ refund to eligible taxpayers. The kicker or state tax surplus credit is triggered when actual revenues for the state’s general fund exceed the forecasted amount by more than 2%.
Who’s Eligible for the Oregon Tax Kicker?
To be eligible for the Oregon Tax Kicker, you must meet the following criteria:
- You must have filed an Oregon income tax return for the 2022 tax year.
- You must not have any outstanding state debts, such as unpaid taxes or fines.
- You should not have requested to redirect your kicker to a specific account or charity.
Taxpayers who have not filed their 2022 tax return, should do so now to claim the kicker credit when filing a 2023 tax return.
How to Calculate Your Oregon Tax Kicker
To determine if you are eligible for the 2023 Oregon Tax Kicker, and how much you may receive, the Oregon Department of Revenue (ODOR) follows a simple formula:
- Multiply your 2022 tax liability before any credits, found on line 22 on the 2022 OR-40 form, by 44.28 percent to calculate your portion of the Oregon kicker.
- If you claimed a credit for tax paid to another state, subtract that credit amount from your liability before calculating the credit you’ll receive.
The refund amount is based on your income tax liability, so the more you paid in taxes, the larger your refund may be.
There’s also a What’s My Kicker calculator available on Revenue Online which will require entering your name, Social Security Number and filing status for 2022 and 2023.
How to Receive Your Oregon Tax Kicker
The refund is calculated as part of your 2023 Oregon personal income tax return. Filing instructions will include information on how to claim the credit on Form OR-40 for full-year Oregon residents, Form OR-40-P for part-year residents and Form OR-40-N for nonresidents, according to a release from the DOR.
If you qualify for the 2023 Oregon Tax Kicker, the ODOR will automatically calculate your refund and issue a check or direct deposit to your bank account as part of your 2023 tax return filing. You do not need to take any other action to claim your kicker.
What You Can Do Now
- Update Your Information: please ensure that your address and bank account information are up to date with the Oregon Department of Revenue to avoid any delays in receiving your refund. You can check and update this information on their website.
- File Your 2022 Taxes: if you have not filed your 2022 tax return, do so now to claim the kicker credit when filing a 2023 tax return.
- Stay Informed: keep an eye on official announcements from the Oregon Department of Revenue for updates on the tax kicker, including the timing and eligibility criteria.
- Plan Ahead: if you anticipate receiving a kicker refund, talk to your financial planner about how you might use the funds to impact your financial situation, such as paying down debt, saving, or making investments.
- Adjust Estimated Tax Payments: If you are making estimated tax payments, the kicker may cover the 4th quarter estimated tax payment due January 15, 2024.
At Integrated Tax Services we are committed to helping you navigate your finances and help you make the most of opportunities like the Oregon Tax Kicker. If you have any questions or need assistance, please do not hesitate to contact our team. We are here to provide the guidance and support you need.