On Friday, the Oregon Department of Revenue revealed that the state has a projected surplus of $1.41 billion for the 2023-25 biennium, leading to the announcement of a kicker tax credit for Oregonians in 2026. The kicker tax credit is distributed every two years and will be available to eligible residents who file both their 2024 and 2025 tax returns. The credit will either increase the amount of their state tax refund or reduce their tax liability for the 2025 tax year.
To assist taxpayers in determining their expected credit, the Department of Revenue has launched a dedicated website featuring a “What’s My Kicker?” calculator. Taxpayers who do not have a filing requirement for 2025 will still need to file a return to claim their credit. The instructions for the 2025 Oregon personal income tax return will provide comprehensive details on claiming the kicker. Full-year residents will use Form OR-40, part-year residents will utilize Form OR-40-P, and non-residents will complete Form OR-40-N. Those filing composite and fiduciary-income tax returns are also eligible for the credit. Taxpayers should be aware that the state may apply all or part of their kicker credit towards any outstanding state debts, including overdue taxes from previous years, child support, court fines, or student loans.
Additionally, taxpayers have the option to donate their kicker credit to the Oregon State School Fund for K-12 public education. However, this donation must be the entire amount, and once made, it is permanent and non-reversible. Taxpayers can also choose to contribute a portion or all of their refund to any of the 29 charities sanctioned by the Charitable Checkoff Commission, using Form OR-DONATE for the designation. For further details, taxpayers can visit the Oregon surplus “kicker” credit page on the Department of Revenue’s website, where a fact sheet is also available.
Those who have yet to file their 2024 Oregon tax return can still do so electronically using tax preparation software or the Direct File Oregon option. Free tax preparation services are accessible for both federal and Oregon tax returns, with various companies providing free software and e-filing for eligible taxpayers. Links to these resources can be found on the Department of Revenue’s website.
The Department of Revenue plans to announce when taxpayers can begin filing their 2025 Oregon tax returns in January. They will continue to offer Direct File Oregon as a free electronic filing option. The fastest way for taxpayers to claim and receive their kicker credit is to file electronically and opt for direct deposit. Two years ago, Oregon experienced a significant surplus of $5.61 billion, underscoring the state’s strong fiscal position.
