State & Local Tax Impacts of COVID-19 for Oregon – 2021

Thoughtware Alert Published: May 03, 2021 | Updated: Oct 30, 2021

Information current as of October 30, 2021.

COVID-19 has changed life across the globe. Many taxing jurisdictions are taking mitigating actions to create social distance and aid taxpayers. The following is a running list of actions by jurisdiction, which generally result in additional time to file and/or pay. Further, many jurisdictions have closed their offices to in-person use by taxpayers and suspended their audit and administrative functions. This alert doesn’t cover similar waivers from local-level taxing authorities. These developments continue to quickly evolve; check with your BKD Trusted Advisor or visit our COVID-19 Resource Center for current information as needed.

Information Specific to Oregon

  • Oregon issued information on economic impact payments for individual income tax purposes. The payments aren’t taxed as income in the state but may affect federal tax calculations used on tax returns. For tax-year 2020, tax filers may subtract the first $6,950 in federal taxes paid from state taxable income. Taxpayers who won’t be affected include 1) lower-income taxpayers who don’t have a federal tax liability; 2) taxpayers whose federal income tax paid, after subtracting the total of their economic impact payments, is greater than $6,950; and 3) taxpayers who didn’t receive economic impact payments or won’t receive the recovery rebate credit as determined by the IRS.
    • Oregon Department of Revenue, Economic Impact Payments Notice, February 1, 2021.
  • Oregon updated its COVID-19 nexus guidance. Previously, Oregon announced that for the purposes of the corporate excise (income) tax, the presence in Oregon of teleworking employees of an employer corporation wouldn’t be treated by Oregon as a relevant factor when making a nexus determination if the employee(s) in question would otherwise have been regularly based outside Oregon absent the COVID-19 pandemic. The guidance has been expanded for purposes of the personal income tax. The guidance applies between March 8, 2020, and the expiration of the COVID-19 notice. The notice expires the later of 1) the expiration date of Oregon Executive Order 20-67; 2) the date of expiry of an emergency declaration, a stay-at-home or similar government order related to COVID-19 and issued by the state government for the employee’s assigned work location; or 3) December 31, 2021.
    • Oregon DOR, Tax Relief Options; March 15, 2021.
  • Oregon is automatically extending the income tax filing due date for individuals for the 2020 tax-year from April 15, 2021, to May 17, 2021. Individual taxpayers also can postpone state income tax payments for the 2020 tax-year due on April 15, 2021, to May 17, 2021, without penalties and interest, regardless of the amount owed. This postponement applies to individual taxpayers, including individuals who pay self-employment tax. Individual taxpayers don’t need to file any forms or call the Department of Revenue to qualify for this automatic tax filing and payment relief. Individual taxpayers who need additional time to file beyond the May 17 deadline can request a filing extension until October 15 by filing the federal extension. Oregon recognizes a taxpayer’s federal extension.
    • State of Oregon; News Release; March 17, 2021.
  • Oregon issued clarification on the extended tax filing deadline for tax-year 2020. The April 30 due date for Quarterly Statewide Transit Tax Withholding returns and payments for the first quarter isn’t extended. Taxpayers have until May 17 to contribute to their individual retirement accounts for tax-year 2020. The April 15 estimated income tax payment due date for tax-year 2021 hasn’t been extended. Lastly, contributions to Oregon 529 College Savings Network accounts need to be made by April 15 to qualify for the refundable credit.
    • Oregon DOR, Tax-Year 2020 Filing FAQs; March 25, 2021.
  • Oregon will adjust 2020 state income tax returns for those who have already filed but received unemployment benefits that are now exempt from tax. Adjustments will be made to exempt up to $10,200 of unemployment benefits per person in 2020 for households with less than $150,000 in income in accordance with federal provisions under the American Rescue Plan Act of 2021. Taxpayers who already filed their 2020 returns don’t need to file an amended return, and most of the thousands of affected taxpayers will receive a refund. Those who haven’t yet filed should just flow through the adjustment with federal taxable income to their Oregon return.
    • Oregon DOR, News Release; March 26, 2021.
  • Oregon provided guidance on state tax treatment of the Employee Retention Credit. The state allows a subtraction equal to the total amount of wage expense reduction on the federal income tax return, so taxpayers should subtract the federally disallowed wage expense in the tax-year taxpayers first claimed the federal credit. Individuals, partners, and S corporation shareholders should use subtraction code 340, and corporations should use subtraction code 354.
    • Oregon DOR, FAQs; April 28, 2021.
  • Oregon adopted a regulation providing an interest waiver for taxpayers affected by the COVID-19 pandemic for 2019 corporate income and individual income tax purposes. The rule includes a measure granting the waiver to business income taxpayers who 1) have gross receipts of less than $5 million; 2) owe tax year 2019 income tax because of financial hardship related to COVID-19; and 3) entered into a DOR-approved payment plan or pay the balance of the tax liability within six months of the date of assessment.
    • Oregon Regulation §150-305-0071, effective July 13, 2021.
  • Oregon legislation authorizes a county to pass a resolution or ordinance waiving interest on unpaid property taxes on delinquencies that are substantially due to the effects of the COVID-19 pandemic (or the 2020 Oregon fire season). The exemption applies to the property tax year beginning July 1, 2020, for interest imposed with respect to ad valorem property taxes imposed on real property used in a taxpayer’s business, provided there were no uncontested delinquent property taxes on the property outstanding as of February 15, 2020. A tax delinquency is substantially due to COVID-19 if the business conducted on the real property was subject to shutdown orders related to the declaration (and extensions) of the state of emergency issued by the governor on March 8, 2020, and at least 25 percent of the lease income owed to the taxpayer under contract for the real property is in arrears or the business revenue attributable to the use of the property for any quarter of calendar-year 2020 is at least 25 percent less than the business revenue attributable to the use of the real property for the same quarter of calendar-year 2019. The waiver terminates January 2, 2023.
    • Oregon H.B. 2247, effective September 25, 2021.
  • Oregon legislation reduces the effect of COVID-19 unemployment insurance (UI) benefits on employer state unemployment insurance (SUI) tax rates, codifies the program that allows employers to defer payment of their SUI contributions, and offers forgiveness of SUI contribution deferrals to employers that experienced significant SUI tax rate increases in 2021. The legislation requires that SUI tax rates for calendar years 2022 through 2024 be computed using the same employer experience that was used to determine the SUI tax for calendar year 2020, i.e., the period before the COVID-19 emergency began. Further, the lookback period used to determine the UI trust fund solvency level is extended from 10 years to 20 years, provides that calendar years 2020 and 2021 will be omitted from the lookback period, and makes other changes designed to permanently lower the UI trust fund balance, statewide tax schedule, and employer SUI tax rates.
    • Oregon H.B. 3389, effective September 25, 2021.

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