New Tax Credits Available to Low-Income Families Via Oregon Kids Credit
Established by the legislature in 2023, a new state tax credit has been initiated in Oregon. Implemented to provide potential relief to the state’s lowest-income families, The Oregon Kids Credit seeks to provide financial support to low-income individuals who have young dependent children.
The new credits are available to eligible families who have a Modified Adjusted Gross Income (MAGI) not exceeding $25,000 and allow $1,000 per child for up to five dependent children under the age of six years old at the end of the tax year, with a maximum benefit of $5,000. Qualifying families and individuals with a MAGI up to $30,000 can claim a partial credit.
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The 2024 distribution of refunds has started, as the agency’s annual refund hold- aimed at preventing fraud, has been completed. In the tax season this year, Oregon will be refunding $5.61 billion in surplus revenue to taxpayers, seen as a ‘kicker’ tax credit.
Refunds are generally issued within two weeks, but returns requiring further review could take up to 16 weeks. The Oregon Department of Revenue’s Revenue Online website enables taxpayers to track the status of their refund with their ‘Where’s My Refund?’ tool and a video can also be accessed to get a better of the process.
Existing Tax Credits That Can Be Accessed
When combined with other existing federal and state Earned Income Tax Credits (EITC and in Oregon, EIC), the new Oregon Kids Credit could enhance tax refunds for low-income families significantly, and could potentially exceed $13,000. The partially refundable Working Family Household and Dependent Care Credit (WFHDC)- which helps cover dependent care costs for low- to moderate-income families, could also be available to families that are eligible for the Oregon Kids Credit.
As an incentive to save for education and job training, the Education Savings Credit for contributions to Oregon 529 Plan accounts, refundable tax credits of up to $170 for Oregon’s single filers and $340 for joint filers are on offer. Contributions to Oregon ABLE Savings Plan accounts- benefiting individuals with disabilities, also qualify under this scheme.
Any excess credit beyond the tax liability can be refunded as all three credits are fully refundable, but taxpayers must file a return to qualify for these credits. Several free filing options- including free fillable forms and the newly introduced direct File Oregon are available, or taxpayers could access any of the free assistance options on the Department of Revenue’s website.
Taxpayers who don’t generally file a tax return could still be eligible to receive a tax refund by claiming these credits. More information about tax benefits is available on the agency’s Families page, and free tax preparation sites can be accessed by dialing 211.
