The Oregon Office of Economic Analysis has announced that the kicker rate applicable to 2019 tax returns filed in 2020 is 17.171%, the second largest in Oregon history. The previous high was 18.6% for 2007. The rate is a sizable increase from the 5.6% kicker available on returns for the 2017 tax year.
The kicker originated from a law passed in 1979 which requires the state to rebate excess revenue to taxpayers when actual general fund revenues exceed the forecasted amounts by more than 2%.
The rebate is available to individuals, trusts and estates, and composite income tax filers. The kicker is calculated based on the final 2018 tax liability before all credits except for the credit for taxes paid to other states. For an Oregon resident individual, this is line 29 on page 2 of your 2018 return minus the credit for taxes paid to other states, if any, included on line 25. Multiply the result by 17.171% to arrive at your kicker rebate. The amount is basically treated as an additional payment for the 2019 tax year and is refundable, even in the absence of a tax liability. The rebate is available to nonresidents as well.
For taxpayers making estimated tax payments for 2019, it might be possible to reduce your 4th quarter estimate by the amount of the kicker, but be cautious on this front, as many estimated tax payment schedules are based on the “safe harbor” prior year tax liability.
For individuals whose filing status changed to married filing jointly in 2019 from single, head of household, qualifying widow(er) or married filing separately in 2018, the rebate is the sum of the amounts calculated from each spouse’s individual return for 2018. For individuals whose filing status changed from married filing jointly in 2018 to single, head of household, qualifying widow(er) or married filing separately in 2019, each person’s kicker is based on their share of federal adjusted gross income for 2018.
If a taxpayer died in 2018 or 2019 and a 2019 return is not required to be filed, a return must be filed in any event to receive the kicker refund.
Oregon promises to have an online kicker calculator available before filing season begins.
As always, feel free to email me about this article or other tax matters.