Oregon Kids Credit Provides Tax Credits for Low-Income Families

Salem, Oregon- A new state tax credit has been introduced in Oregon, offering potential relief to the state’s lowest-income families. The Oregon Kids Credit, established by the Legislature last year, is aimed at providing financial support to low-income individuals with young dependent children.

For eligible families with a modified adjusted gross income (MAGI) of $25,000 or less, the credit offers $1,000 per child for up to five dependent children under the age of six at the end of the tax year, resulting in a maximum benefit of $5,000. Partial credit is also available for individuals and families with MAGI up to $30,000.

This new credit, when combined with existing federal and state earned income tax credits (EITC and Oregon EIC), could significantly enhance tax refunds for low-income families, potentially exceeding $13,000.

All three credits are fully refundable, meaning any excess credit beyond the tax liability can be refunded. Moreover, taxpayers who don’t typically file a tax return may still be eligible to claim these credits and receive a tax refund.

To qualify for these credits, taxpayers must file a return. Oregon provides various free filing options, including free fillable forms and the newly introduced Direct File Oregon. Additionally, taxpayers can access free assistance options on the agency’s website.

Families eligible for the Oregon Kids Credit are likely eligible for the partially refundable Working Family Household and Dependent Care Credit (WFHDC) as well, which aids in covering dependent care costs for low- to moderate-income families.

In a bid to incentivize saving for education and job training, Oregon offers the Education Savings Credit for contributions to Oregon 529 Plan accounts, providing refundable tax credits of up to $170 for single filers and $340 for joint filers. This credit is also available for contributions to Oregon ABLE Savings Plan accounts, benefiting individuals with disabilities.

For further details on these tax benefits, taxpayers can visit the Tax benefits for families page. They can also find free tax preparation sites by dialing 2-1-1 or visiting the Oregon Department of Revenue website.

The distribution of refunds has started, following the completion of the agency’s annual refund hold aimed at preventing fraud. As part of the 2024 tax season, Oregon is returning $5.61 billion in surplus revenue to taxpayers in the form of a “kicker” tax credit.

Most refunds are issued within two weeks, although those requiring further review may take up to 16 weeks. Taxpayers can track the status of their refund using the department’s Where’s My Refund? tool on Revenue Online, while a video outlining the refund process and timelines is also available to aid understanding.