As the 2023 filing season is quickly approaching, we would like to remind you of Oregon's important tax changes.
What's new for credits?
- Oregon Kids Credit. A new refundable tax credit is available to eligible taxpayers with a qualifying child age 5 or younger.
- Forest conservation credit. A new tax credit is available to small forestland owners that choose to create a forest conservation area. The forest conservation area requires restrictions on harvest to be followed for 50 years.
- Agricultural Employer Overtime Tax Credit. A refundable credit is available for employers who pay overtime to their agricultural workers. Employers must apply for the credit in January for overtime wages paid in the prior year, and they must receive notification of the credit amount from the Department of Revenue before the credit can be claimed.
What's new for adjustments/deductions?
Paid Leave Oregon benefits. Oregon's new program providing medical, family, and safe leave began paying benefits September 3, 2023. Changes to your return may be necessary if you received benefits under the program.
National Guard subtraction. Pay for active service in the Nation Guard can now generally be subtracted from taxable income if the service is authorized by the Governor. This change also applies retroactively to tax years 2021 and 2022. If you received National Guard pay during those years, you will need to amend your return to take advantage of the subtraction.
Casualty loss from state-declared emergency. If you experienced a loss in Oregon due to a state-declared emergency and weren't able to deduct it on your federal return, you may be able to take a subtraction on your Oregon return. This subtraction applied to tax years 2020, 2021, and 2022, as well as future years. If you meet the requirements for the subtraction for those years, you'll need to amend your return to take advantage of the subtraction.
Pass-through entity elective tax. There is now a subtraction available for refunds of the elective tax that were passed through to you and included as income on your federal return.
- Federal tax liability subtraction. The 2023 federal tax subtraction limit is $7,800 ($3,900 for married filing separately). It may be limited further based on your adjusted gross income (AGI).