Oregon Credits & Subtractions

For a state that has no sales tax and hence relies heavily on income tax collections, Oregon has a surprising number of tax credits and subtractions from income available to taxpayers. Many are somewhat obscure and only apply to a limited number of people, but the following items are more or less available to everyone.

Oregon Tax Credits

Political Contribution Credit

Although political contributions have not been tax-deductible for Federal purposes for many years, contributions made to a political party, to a candidate that appears on a ballot anywhere in Oregon, or to a Political Action Committee registered in Oregon, are eligible for a state income tax credit. The maximum is $50 for an individual, or $100 on a joint return.

What this means is that if during the year you gave $100 to a candidate running for office, or if you gave $100 to the Republican Party or the Democratic Party, you’ve got a tax credit coming. If you have payroll deductions that include both union dues an PAC contributions (very common for nurses and teachers), you’re eligible for this credit. Again, on the Federal side of things, you’d get nothing. Please note that is is a dollar-for-dollar reduction in the tax owed to Oregon, and that it phases out when taxable income reaches $100,000 (single filers) or $200,000 (joint filers).

Oregon Cultural Trust

The Oregon Cultural Trust (http://www.culturaltrust.org/) offers another unique state benefit. The OCT supports more than 1,300 non-profits statewide in the development of arts, heritage and humanities programs. You can search at their website to see if an organization you make a donation to is on their list. If so, and if you make a matching contribution directly to the OCT, you will get a tax credit of up to $500 for an individual or up to $1,000 on a jointly file return.

For example, let’s say earlier in the year you gave $100 to Oregon Public Broadcasting, or to OMSI, or the Portland Art Museum. As these non-profits are part of the Oregon Cultural Trust network, you could now make a matching $100 contribution to the OCT. This would give you an additional $100 charitable contribution to deduct on your Federal tax return, and it would give you a $100 Oregon tax credit.

The bottom line on both the Political Contribution and the Oregon Cultural Trust tax credits is that, if you expect to have any state tax liability, you can in effect pay off some of what you owe simply by giving a bit of money to someone or something you like as opposed to letting the Oregon Department of Revenue have it. Higher income taxpayers should note that these credits can phase out when their Adjusted Gross Income reaches six figures.

Oregon Subtractions from Taxable Income

Oregon 529 College Savings Plan

Here is another tax benefit the the Feds have done away with but Oregon continues to offer. Contributions made to the Oregon College Savings Plan https://www.oregoncollegesavings.com/ are subtractions from your state taxable income, up to the limits of $2,375 for single filers, $4,750 on a jointly-filed return. These contributions may made up until 4/15/2019 and still be deductible on your 2018 Oregon return. Any contributions made in excess of the annual maximum are be carried forward for up to five years and deducted later on. Please note that only contributions made to the Oregon 529 plan are eligible.

Oregon Special Medical Subtraction

If you or a family member is age 65 or older as of December 31, 2018, a portion of that individual’s medical expenses (up to a maximum of $1,800, depending on income) can be subtracted from Oregon taxable income. If this applies to you, you’ll want to keep separate records of those paid expenses and have them ready at tax time.