Oregon Income Tax Withholding Form - Department Of Revenue

Oregon income tax withholding

March 2010

By law (ORS 316.167), all Oregon employers must

should be made only once. These conditions cause

withhold tax from employee wages at the time em-

Oregon withholding to be lower than the taxpay-

ployees are paid. The Oregon Department of Rev-

er’s actual Oregon tax liability.

enue provides tables to figure the amount of tax to

• When you have large amounts of nonwage income

withhold each pay period. The amount withheld

such as interest, dividends, or capital gains, with-

depends on the employee’s wages, filing status, and

holding will be too low. That is because no withhold-

number of withholding allowances claimed.

ing is made for the nonwage income. For example, if

you receive half of your income from wages and half

What are the tables designed to do?

from capital gains, then your Oregon withholding

will be only about half of your actual tax liability

Oregon’s withholding tables estimate the tax due on

because no withholding is made for capital gains.

your wages. The tables consider your wages, filing sta-

• When you have unusually large deductions, federal

tus, and number of withholding allowances claimed.

and Oregon withholding will be too high. That’s

Your employer gets this information from your federal

because the withholding tables do not take into

Form W-4. It is the same information used for the fed-

account your larger deductions. Even if you adjust fed-

eral withholding calculation, unless you ask that dif-

eral Form W-4 to claim more withholding allowances,

ferent information be used for Oregon withholding.

Oregon withholding might still be too high. That is

In some cases, the tables might not represent your

because an additional withholding allowance reduces

total tax liability. If you meet one of the following

federal withholding proportionally more than Oregon

qualifications, the amount of withholding might be

withholding. This means if you adjust your withhold-

higher or lower than your actual tax liability:

ing allowances to make federal withholding accurate,

• You are in a dual-earner household filing a

Oregon withholding might still be too high.

joint return;

What can you do if your Oregon withholding

• You have more than one job;

is too high or too low?

• You have large amounts of nonwage income;

• You have large deductions;

If Oregon and federal withholding are too high or too

• You claim federal credits that don’t apply to Ore-

low, file a revised federal Form W-4 with your employ-

gon, such as federal child tax credit; or

er. If withholding is too high, claim more withholding

• You claim Oregon credits not accounted for on the

allowances. If withholding is too low, claim fewer al-

federal tax form, such as Oregon Working Family

lowances. The revised W-4 will affect both Oregon and

Child Care Credit.

federal withholding in the same direction.

Does the amount withheld equal your tax

If federal withholding is close to your tax liability but

Oregon withholding is not, the adjustment can still be

liability?

made by filing a revised federal Form W-4. Write “For

In most cases, Oregon withholding is close to your ac-

Oregon Only” across the top of the form. This will tell

tual Oregon tax liability. However, there are some cas-

your employer to change your Oregon withholding

es when Oregon withholding may be too high or too

only. Again, if Oregon withholding is too high, claim

low. The most common cases are discussed below.

more withholding allowances. Each additional allow-

• When a household has two wage earners or a wage

ance will reduce your withholding for the year by

earner with more than one job, Oregon withhold-

approximately $100. If withholding is too low, claim

ing might be too low. This is because the withhold-

fewer allowances or show an additional dollar amount

ing tables are designed for households with a single

to be withheld. If you choose to have an additional

wage earner with a single job. When a household

amount withheld, the guidelines in the chart shown

has two workers filing a joint return, or a worker

below may help you calculate the correct amount.

with more than one job, the withholding tables

If you claim federal credits that don’t apply to Ore-

apply the top tax rate of 9 percent to too little of the

gon such as the federal child tax credit or you claim

combined income. Also, the subtraction for federal

income taxes paid will be made for each job, but it

Oregon credits not allowed on the federal tax form,

(over)

150-206-643 (Rev. 03-10)

Oregon Income Tax Withholding Form - Department Of Revenue - 2010

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