Oregon Gives Taxpayers A Slight Break

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The Oregon Department of Revenue is providing relief for some taxpayers by waiving underpayment interest for taxpayers whose 2018 Oregon withholding and estimated tax payments were impacted by the federal Tax Cuts and Jobs Act.

This waiver is available to taxpayers:

  • Who owe at least $1,000 in tax, and
  • Whose total Oregon withholding and estimated payments made on or before January 15, 2019 covered at least 85 percent of their 2018 net tax.

The usual threshold is 90 percent to avoid underpayment interest.

If a taxpayer paid less than 85 percent of their tax liability, they are not eligible for the waiver. Those taxpayers who did not pay at least 85 percent of their tax liability will be subject to the underpayment interest. Taxpayers who owe less than $1,000 are not charged underpayment interest.

Are you eligible for a waiver?

Complete Part A of Form OR-10 (www.oregon.gov/dor/forms). If the form shows that you owe overpayment interest, follow these steps:

  1. Combine your total estimated tax payments made by January 15, 2019 with the amount of withholding entered on line 6 of the form.
  2. Multiply the net tax amount on line 4 by 0.85.
  3. If the amount from step 2 is less than step 1, request a waiver. If not, complete the rest of Form OR-10 to calculate the underpayment interest you owe.

Requesting a waiver (paper and electronic filers):

  1. Enter "4" in the exception box on Form OR-10, line 1.
  2. Also enter "4" in box 40a on your 2018 Form OR-40, which is your personal income tax return (box 65a on part-year returns or 66a on nonresident returns). If you've already filed your 2018 return, you can mail the Form OR-10 to DOR or submit it electronically through your Revenue Online account.
  3. Attach a statement to your Form OR-10 with the label "Form OR-10 attachment" and the statement "85% waiver."
  4. File your Form OR-10 and attachment with your 2018 tax return.

DOR urges Oregonians to do a paycheck checkup to ensure they’re withholding enough from their wages for 2019. Oregon’s new Form OR-W-4 and online withholding calculator allow taxpayers to more accurately determine the appropriate amount to withhold for Oregon. Both the Form OR-W-4 and the calculator are available at the department’s website at www.oregon.gov/dor.

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