2017 ORS 315.264¹
Working family household and dependent care expenses
  • rules

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This section is amended
Effective June 2, 2018
Relating to tax expenditures; creating new provisions; amending ORS 307.517, 307.518, 307.523, 307.529, 307.535, 315.176, 315.184, 315.264, 315.516 and 317.097 and section 1, chapter 112, Oregon Laws 2016; and prescribing an effective date.

(1)(a) A credit against the tax otherwise due under ORS chapter 316 shall be allowed a taxpayer in an amount equal to a percentage of employment-related expenses of a type allowable as a credit pursuant to section 21 of the Internal Revenue Code, notwithstanding the limitation imposed by section 21(c) of the Internal Revenue Code, and limited as provided in paragraph (c) of this subsection.

(b) The credit allowed under this section may be claimed for expenses for care of a qualifying individual that allow a nonmarried taxpayer to seek employment or to attend school on a full-time or part-time basis.

(c) The employment-related expenses for which a credit is claimed under this section may not exceed the lesser of:

(A) Income earned in Oregon and reported on the taxpayer’s return; or

(B) $12,000 for a taxpayer for which there is one qualifying individual, or $24,000 for a taxpayer for which there are two or more qualifying individuals.

(d) The limitations in paragraph (c) this subsection shall be reduced by the aggregate amount excludable under section 129 of the Internal Revenue Code for the tax year.

(2) The applicable percentage described in subsection (1) of this section shall be determined in accordance with the following table:

______________________________________________________________________________

Greater of Federal

or Oregon Adjusted

Gross Income, as Applicable percentage based on age of youngest

Percentage of Federal qualifying individual on January 1 of tax year

Poverty Level

______________________________________________________________________________

At least 6 years

but less than

At least 13, or at least

3 years 13 but less 18 years or

Greater Less than Under 3 but less than 18 if older if

than or equal to years than 6 disabled disabled

0% 10% 10% 8% 5% 5%

10% 20% 20% 18% 15% 5%

20% 30% 30% 28% 25% 10%

30% 40% 40% 38% 35% 20%

40% 50% 50% 48% 45% 30%

50% 60% 55% 53% 50% 35%

60% 70% 60% 58% 55% 40%

70% 80% 65% 63% 60% 45%

80% 90% 70% 68% 65% 50%

90% 110% 75% 73% 70% 55%

110% 120% 71% 69% 66% 50%

120% 130% 66% 64% 61% 45%

130% 140% 61% 59% 56% 39%

140% 150% 55% 53% 50% 33%

150% 160% 50% 48% 45% 28%

160% 200% 47% 45% 42% 25%

200% 210% 45% 43% 40% 22%

210% 220% 40% 38% 35% 20%

220% 230% 35% 33% 30% 15%

230% 240% 30% 28% 25% 10%

240% 250% 20% 18% 15% 5%

250% 260% 10% 8% 5% 5%

260% 280% 6% 6% 4% 4%

280% 300% 4% 4% 4% 4%

300% - 0% 0% 0% 0%

______________________________________________________________________________

(3) The applicable percentage for a household in excess of eight members shall be calculated as if for a household size of eight members.

(4) The credit under this section is not allowed:

(a) To a taxpayer with federal adjusted gross income or Oregon adjusted gross income, whichever is greater, in excess of 300 percent of the federal poverty level; or

(b) To any taxpayer who does not report earned income that is taxable by Oregon on the taxpayer’s return.

(5) In order to ensure compliance with the eligibility requirements of the credit allowed under this section, the Department of Revenue shall be afforded access to utilization data maintained by the Department of Human Services in its administration of the Employment Related Day Care program.

(6) The Department of Revenue may assess a penalty in an amount not to exceed 25 percent of the amount of credit claimed by the taxpayer against any taxpayer who knowingly claims or attempts to claim any amount of credit under this section for which the taxpayer is ineligible, or against any individual who knowingly assists another individual in claiming any amount of credit for which the individual is ineligible.

(7) The Department of Revenue may adopt rules for carrying out the provisions of this section and prescribe the form used to claim a credit and the information required on the form.

(8) A nonresident individual shall be allowed the credit computed in the same manner and subject to the same limitations as the credit allowed a resident by subsection (1) of this section. However, the credit shall be prorated using the proportion provided in ORS 316.117 (Proration between Oregon income and other income for nonresidents, part-year residents and trusts).

(9) If a change in the taxable year of a taxpayer occurs as described in ORS 314.085 (Taxable year), or if the Department of Revenue terminates the taxpayer’s taxable year under ORS 314.440 (Tax as debt), the credit allowed by this section shall be prorated or computed in a manner consistent with ORS 314.085 (Taxable year).

(10) If a change in the status of a taxpayer from resident to nonresident or from nonresident to resident occurs, the credit allowed by this section shall be determined in a manner consistent with ORS 316.117 (Proration between Oregon income and other income for nonresidents, part-year residents and trusts).

(11) If the amount allowable as a credit under this section, when added to the sum of the amounts allowable as payment of tax under ORS 316.187 (Amount withheld is in payment of employee’s tax) or 316.583 (Effect of payment of estimated tax or installment), other tax prepayment amounts and other refundable credit amounts, exceeds the taxes imposed by ORS chapters 314 and 316 for the tax year after application of any nonrefundable credits allowable for purposes of ORS chapter 316 for the tax year, the amount of the excess shall be refunded to the taxpayer as provided in ORS 316.502 (Distribution of revenue to General Fund).

(12) Any amount that is refunded to the taxpayer under this section and that is in excess of the tax liability of the taxpayer does not bear interest. [2015 c.701 §3; 2017 c.638 §2]

Note: Section 5, chapter 701, Oregon Laws 2015, provides:

Sec. 5. Section 3 of this 2015 Act [315.264 (Working family household and dependent care expenses)] applies to tax years beginning on or after January 1, 2016, and before January 1, 2022. [2015 c.701 §5]

Chapter 315

Notes of Decisions

State could not recalculate tax for tax year closed to review in order to prevent elective carry forward of tax credit to tax year subject to review. Smurfit Newsprint Corp. v. Dept. of Revenue, 329 Or 591, 997 P2d 185 (2000)

1 Legislative Counsel Committee, CHAPTER 315—Personal and Corporate Income or Excise Tax Credits, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ors315.­html (2017) (last ac­cessed Mar. 30, 2018).
 
2 Legislative Counsel Committee, Annotations to the Oregon Revised Stat­utes, Cumulative Supplement - 2017, Chapter 315, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ano315.­html (2017) (last ac­cessed Mar. 30, 2018).
 
3 OregonLaws.org assembles these lists by analyzing references between Sections. Each listed item refers back to the current Section in its own text. The result reveals relationships in the code that may not have otherwise been apparent.