In a historic announcement, the Oregon Office of Economic Analysis (OEA) has revealed a revenue surplus of over $5.61 billion for the 2021-2023 biennium. This surplus, the largest in the state’s history, is set to trigger a tax surplus credit, commonly referred to as the “kicker,” for the upcoming 2023 tax year.
The surplus will be put back into the hands of Oregon taxpayers through a credit applied to their 2023 state personal income tax returns, which will be filed in 2024. This credit is calculated based on the taxpayers’ liability for the 2022 tax year. Therefore, it is important for taxpayers who haven’t yet filed their 2022 tax returns to do so, to ensure they can claim their kicker credit when filing their 2023 returns.
To figure the amount of their kicker credit, taxpayers can multiply their 2022 tax liability before any credits, as indicated on line 22 of the 2022 Form OR-40, by 44.28 percent. The OEA determines and certifies this percentage. Taxpayers who have already claimed a credit for taxes paid to another state must subtract that credit amount from their liability before calculating the kicker.
For added convenience, personal income taxpayers can determine their kicker credit amount using the “What’s My Kicker? Calculator” available on Revenue Online. This tool requires taxpayers to input their name, Social Security Number, and filing status for both 2022 and 2023.
It is important to note that taxpayers are eligible to claim the kicker if they filed a 2022 tax return and had tax due before any credits. Even those without a filing obligation for 2023 must file a 2023 tax return to claim their credit. Detailed instructions 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 will be provided in the 2023 Oregon personal income tax return instructions. Composite and fiduciary-income tax return filers are also eligible.
Taxpayers should be aware that the state may utilize all or part of their kicker to offset any outstanding state debt, including taxes owed from previous years, child support, court fines, or school loans.
Alternatively, taxpayers have the option to donate their entire kicker to the Oregon State School Fund for K-12 public education through a checkbox on their tax return.
Moreover, taxpayers can choose to donate a portion or the entirety of their refund to any or all of the 29 charities approved by the Charitable Checkoff Commission. To specify the amount for donation, taxpayers can use Form OR-DONATE.
For those seeking assistance with tax preparation, free tax preparation services are available for both federal and Oregon tax returns. Some software companies offer free software usage and e-filing for eligible taxpayers, and further information can be found on the Department of Revenue website.
For additional details and resources related to the Oregon surplus “kicker” credit, please visit the Department of Revenue website.
Source: State of Oregon