The Oregon Department of Revenue has confirmed a state revenue surplus exceeding $1.41 billion for the 2023-2025 biennium. This surplus triggers the state's unique tax credit, known as the "kicker," which will be returned to eligible taxpayers when they file their 2025 tax returns in 2026.
This credit is not a direct payment or check but will be applied to individual tax accounts, either increasing a refund or reducing the amount of tax owed. The confirmation comes from the Oregon Office of Economic Analysis (OEA), which officially certified the surplus amount.
Key Takeaways
- Oregon will return a $1.41 billion revenue surplus to taxpayers as a "kicker" credit.
- The credit will be applied to 2025 state income tax returns, which are filed in 2026.
- The credit amount is calculated as 9.863% of a taxpayer's 2024 Oregon tax liability.
- To be eligible, residents must have filed a 2024 tax return and must also file a 2025 return.
How the Kicker Credit Works
Unlike a stimulus check, the Oregon kicker is a non-refundable credit applied directly to a taxpayer's state income tax account. For those expecting a refund from the state, the kicker will increase the total amount they receive. For individuals who owe state taxes, the credit will be used to decrease their tax bill.
It is important for residents to understand that eligibility is contingent on filing tax returns for two consecutive years. Anyone who filed a 2024 Oregon tax return and proceeds to file a 2025 return will be eligible to claim their portion of the surplus.
State officials emphasize that taxpayers who have not yet filed their 2024 return should do so as soon as possible to ensure they qualify for the credit next year.
A History of Surpluses
The kicker law is a unique feature of Oregon's fiscal policy, designed to return unexpected revenue growth to taxpayers. While the current $1.41 billion surplus is significant, it is smaller than the record-breaking $5.61 billion surplus returned to taxpayers two years ago, reflecting changing economic conditions.
Calculating Your Share of the Surplus
The specific amount each taxpayer will receive depends on their individual tax situation from the previous year. The Oregon Office of Economic Analysis has determined the exact percentage for the credit calculation.
The Kicker Formula
To calculate your credit, you must multiply your 2024 personal income tax liability by 9.863%. This liability figure is found on line 24 of the 2024 Form OR-40.
The Oregon Department of Revenue has simplified this process by providing an online tool. Taxpayers can visit the Revenue Online portal and use the "What’s My Kicker?" calculator to get an estimate of their credit amount.
Using the Online Calculator
To use the calculator, you will need to provide some basic information from your 2024 tax filing:
- Your full name
- Your Social Security Number
- Your filing status for 2024 (e.g., single, married filing jointly)
The tool will then provide a personalized estimate of the credit you can expect to see on your 2025 tax return.
How to Claim Your Credit
Claiming the kicker credit is a straightforward part of the annual tax filing process. When Oregonians file their 2025 state income tax returns in early 2026, the tax forms will include a specific section for claiming the credit.
"The fastest way for taxpayers to claim and receive their kicker will be to file electronically and use direct deposit to receive their refund," a statement from the Department of Revenue advised.
Full-year residents will use Form OR-40, while part-year residents and non-residents will use forms OR-40-P and OR-40-N, respectively. The department plans to announce the official start date for the 2025 tax filing season in January 2026.
The state also offers free tax filing options, including Direct File Oregon, which can be used to file both federal and state returns electronically at no cost for eligible taxpayers.
Important Considerations for Taxpayers
While the credit is a welcome return of funds for many, there are a few conditions to keep in mind. The state has the authority to use a taxpayer's kicker credit to offset any outstanding debts owed to state agencies.
These debts can include:
- Unpaid taxes from previous years
- Court-ordered fines
- Child support payments
- Student loans
Additionally, taxpayers have the option to donate their kicker. You can choose to contribute the entire credit amount to the Oregon State School Fund, which supports K-12 public education. This decision is permanent. Taxpayers can also use Form OR-DONATE to contribute part or all of their state tax refund to a list of 29 approved charities.
For more detailed information, taxpayers can visit the Oregon Department of Revenue's official website, which features a dedicated page and fact sheet on the surplus credit.
