TAXES 21-21, Oregon State Income Tax Withholding (2024)

FAQs

How much should I withhold for Oregon state taxes? ›

HB 2119 (2019) requires employers to withhold income tax at a rate of eight (8) percent of employee wages if the employee hasn't provided a withholding statement or exception certificate. Continue withholding at the eight percent rate until the employee submits a withholding statement or exemption certificate.

Oregon has a graduated individual income tax, with rates ranging from 4.75 percent to 9.90 percent. There are also jurisdictions that collect local income taxes. Oregon has a 6.60 percent to 7.60 percent corporate income tax rate and levies a gross receipts tax.

Businesses organized as corporations pay the corporate tax rate, which is 21%. Other business structures — including sole proprietorships, partnerships and S corporations — are considered pass-through entities; their incomes are taxed at the owner's personal tax rate, which is between 10% to 37%.

The federal withholding tax has seven rates for 2021: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. The federal withholding tax rate an employee owes depends on their income level and filing status. This all depends on whether you're filing as single, married jointly or married separately, or head of household.

You can claim anywhere between 0 and 3 allowances on the W4 IRS form, depending on what you're eligible for. Generally, the more allowances you claim, the less tax will be withheld from each paycheck. The fewer allowances claimed, the larger withholding amount, which may result in a refund.

Single. If you are single and do not have any children, as well as don't have anyone else claiming you as a dependent, then you should claim a maximum of 1 allowance. If you are single and someone is claiming you as a dependent, such as your parent, then you can claim 0 allowances.

Claiming 1 on your tax return reduces withholdings with each paycheck, which means you make more money on a week-to-week basis. When you claim 0 allowances, the IRS withholds more money each paycheck but you get a larger tax return.

In other words, withholding tax is income tax paid in advance. The big difference between withholding tax and “regular” income tax is that, with the latter, we compute and file it ourselves. The Withholding Tax Law requires your clients/payors to immediately take your taxes out of the income you earned from them.

The Year in Photos: 2021

Oregon's effective income tax rate of 23.37% for individuals – just ahead of Massachusetts and Connecticut – was buoyed by its state effective tax rate of 7%, which was by far the highest among states.

What is the new tax in Oregon 2023? ›

Beginning January 1, 2023, Oregon employers will be required to make contributions to the state's paid family and medical leave insurance (PFMLI) program. The contribution rate is 1% of taxable wages up to $132,900 (as indexed annually for inflation).

In Oregon, there is no sales tax imposed at the state or local level, but an income tax is imposed on individuals. For 2022, the individual income tax rate is up to 9.90%. In addition, local income taxes are collected by some jurisdictions within Oregon. Oregon imposes a corporate tax rate of 6.60% to 7.60%.

Example of a Tax Withholding

Suppose you earn $2,000 per pay period. Instead of receiving $2,000, you receive a paycheck for $1,600, because your employer has set aside $400 as a tax withholding. For the year, you pay $10,400 in withheld taxes.

Most types of U.S. source income received by a foreign person are subject to U.S. tax of 30%. A reduced rate, including exemption, may apply if an Internal Revenue Code Section provides for a lower rate, or there is a tax treaty between the foreign person's country of residence and the United States.

“Should I Declare Myself Exempt from Withholding?” No, it's not a good idea to claim you're exempt simply in order to get a bigger paycheck. By certifying that you are exempt, the employer would not withhold any federal income tax amounts during the year, and that would result in a large tax bill due in April.

Social Security and Medicare taxes

Federal Insurance Contribution Act (FICA) taxes support the federal Social Security and Medicare programs. The total due every pay period is 15.3% of an individual's wages – half of which is paid by the employee and the other half by the employer.

Single. If you are single and do not have any children, as well as don't have anyone else claiming you as a dependent, then you should claim a maximum of 1 allowance.

Claiming 1 on Your Taxes

Claiming 1 reduces the amount of taxes that are withheld, which means you will get more money each paycheck instead of waiting until your tax refund. You could also still get a small refund while having a larger paycheck if you claim 1.

In most cases, you will get a bigger refund or a lower tax bill if you file jointly with your spouse. However, there are a few situations in which filing separately can actually be more advantageous, including when one spouse has significant miscellaneous deductions or medical expenses.

Claiming more allowances will lower the amount of income tax that's taken out of your check. Conversely, if the total number of allowances you're claiming is zero, that means you'll have the most income tax withheld from your take-home pay.

Should I claim 1 or 2 if I am single? ›

A single filer with no children should claim a maximum of 1 allowance, while a married couple with one source of income should file a joint return with 2 allowances. You can also claim your children as dependents if you support them financially and they're not past the age of 19.

Claiming two allowances

You are single. Claiming two allowances will get you close to your tax liability but may result in tax due when filing your taxes. You're single and work more than one job. Claim one allowance at each job or two allowances at one job and zero at the other. You're married.

No. You cannot claim yourself as a dependent on taxes. Dependency exemptions are applicable to your qualifying dependent children and qualifying dependent relatives only. You can, however, claim a personal exemption for yourself on your return.

Social Security Tax / Medicare Tax and Self-Employment. Federal Unemployment Tax.

Employers withhold taxes from employees' pay. Gross pay is the amount the employee earns.

The term withholding tax refers to the money that an employer deducts from an employee's gross wages and pays directly to the government.

The states with the highest income tax for 2021 include California 13.3%, Hawaii 11%, New Jersey 10.75%, Oregon 9.9%, and Minnesota 9.85%.

California is 19.3% more expensive than Oregon. The housing cost, rent, groceries, and monthly expenses – everything will cost more in CA. Housing costs 39.5% in California, transport costs 11.5% more, and the monthly grocery expense is likely to be 11.8% higher.

Taxes that provide operating revenue for TriMet are administered and collected by the Oregon Department of Revenue. Effective January 1, 2023, the tax rate increased to 0.8037% of the wages paid by an employer and the net earnings from self-employment for services performed within the TriMet District boundary.

If you make $50,000 a year living in the region of Oregon, USA, you will be taxed $11,666. That means that your net pay will be $38,334 per year, or $3,194 per month.

Who is exempt from Oregon taxes? ›

Oregon's personal exemption credit is available to you if: You can't be claimed as a dependent on someone else's return, and. Your federal adjusted gross income isn't more than $100,000 if your filing status is single or married filing separately or isn't more than $200,000 for all other filing statuses.

Personal income tax penalties

You will owe a 5 percent late-payment penalty on any Oregon tax not paid by the original due date of the return, even if you have filed an extension. If you file more than three months after the due date (including extensions), a 20 percent late-filing penalty will be added.

As of 2022, Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming are the only states that do not levy a state income tax. Note that Washington does levy a state capital gains tax on certain high earners.

The 2023 standard deduction for each filing status is: $2,605 for single or married filing separately. $4,195 for head of household. $5,210 for married filing jointly or qualifying surviving spouse.

For employees, withholding is the amount of federal income tax withheld from your paycheck. The amount of income tax your employer withholds from your regular pay depends on two things: The amount you earn. The information you give your employer on Form W–4.

For 2022, the maximum credit is $219 for each qualifying personal exemption. You can claim a credit for yourself, your spouse, and your qualifying child or qualifying relative. An additional exemption credit is available if you or your spouse have a severe disability or if you have a child with a qualifying disability.

Standard deduction 2022

For the 2022 tax year, tax returns are due April 18, 2023. The 2022 standard deduction is $12,950 for single filers and those married filing separately, $25,900 for joint filers, and $19,400 for heads of household.

2023 Standard Deduction

Taxpayers who are at least 65 years old or blind can claim an additional standard deduction of $1,500 is allowed for 2023 ($1,850 if you're claiming the single or head of household filing status).

Enter your anticipated 2022 Oregon deductions. If you don't know your anticipated 2022 deductions, enter the standard deduction for your anticipated filing status. The 2022 standard deduction for each filing status is: $2,420 for single or married filing separately.

By placing a “0” on line 5, you are indicating that you want the most amount of tax taken out of your pay each pay period. If you wish to claim 1 for yourself instead, then less tax is taken out of your pay each pay period.

Am I exempt from Oregon withholding? ›

An employee can claim exempt from Oregon withhold- ing if: Their compensation is exempt under a provision of federal or state law. They had a refund of all state income tax withheld from the previous tax year and expect to have a refund of all state income tax withheld for the current year.

The Earned Income Tax Credit is a federal and state tax credit for people making up to $59,187 a year and can give families up to $6,935 back when they file taxes. Many Oregonians are missing out on this money because they simply don't know about it, or because they aren't filing taxes at all.

Updated March 2018 Page 2 2 Starting January 1, 2018, compensation income earners, self-employed and professional taxpayers (SEPs) whose annual taxable incomes are P250,000 or less are exempt from the personal income tax (PIT). The 13th month pay and other benefits amounting to P90,000 are likewise tax-exempt.

Are Social Security benefits taxable regardless of age? Yes. The rules for taxing benefits do not change as a person gets older. Whether or not your Social Security payments are taxed is determined by your income level — specifically, what the Internal Revenue Service calls your “provisional income.”

The W-4 requires basic personal information, like your name, address, and Social Security number. Previously, the number of allowances and your tax filing status determined how much income tax was withheld from your pay.