In the ever-evolving landscape of state taxes, Oregon’s unique “kicker” credit, designed to return surplus taxes to residents, plays a pivotal role in the state’s tax landscape. This guide provides a thorough exploration of the 2021-23 biennium’s substantial $5.61 billion kicker and its implications for taxpayers.
1. What is the Oregon Kicker? The Oregon surplus credit, fondly known as the “kicker,” Administered by the Oregon Department of Administrative Services (DAS) Office of Economic Analysis (OEA), the kicker returns excess taxes in odd-numbered years when there’s a state revenue surplus.
2. Calculating Your Kicker Credit: For the upcoming 2023 kicker, taxpayers need to multiply their 2022 state taxes owed by 44.28%. This results in a refundable tax credit, allowing residents to either claim it on their return or donate it to the State School Fund.
3. How Much Will You Get? To estimate your kicker credit, multiply line 22 of your 2022 Form OR-40 by 44.28%. Alternatively, Oregon provides a user-friendly “What’s My Kicker?” calculator that requires specific information, including your full name, Social Security number, and filing status for tax years 2022 and 2023. The exact refund amount shown on:
- Line 47 of your Form OR-40, or
- Line 72 of your Form OR-40-N, or
- Line 71 of your Form OR-40-P.
4. Claiming Your Kicker: Eligible taxpayers can claim the credit on their 2023 Oregon state tax return, emphasising the importance of filing the 2022 return for eligibility.
5. Oregon Tax Refund Offsets: It’s crucial to be aware that Oregon may use part or all of the kicker to offset certain state debts, including child support, state tax debt, student loans, and court fines.
6. The Oregon Kids Credit: A new addition for the 2023 tax year is the Oregon Kids Credit, a fully refundable credit worth up to $1,000. However, strict income limits apply, making it essential for families to assess their eligibility.
7. Who Qualifies for the Oregon Kicker? To qualify for the 2023 kicker based on the 2022 tax year, taxpayers must have filed a 2022 Oregon state tax return, file a 2023 Oregon state tax return, and have had tax due on the 2022 state return before any credits.
Conclusion:
As we anticipate the 2023 kicker, understanding its nuances is crucial for maximising tax benefits. Real-life scenarios may vary, but armed with this comprehensive guide, individuals can navigate the process confidently, ensuring they make the most of this unique Oregon tax credit.
Sources:
Oregon Department of Revenue: https://www.oregon.gov/dor/
Oregon Department of Administrative Services: https://www.oregon.gov/das/oa/
Oregon Office of Economic Analysis: https://oregoneconomicanalysis.com/