By News-Register staff • 

Media get it wrong on kicker

Contrary to media reports getting prominent play in recent days, Oregonians who paid state taxes for 2014 will receive some of that money back via the kicker, as long as they file a state tax return for 2015. That's true even if they owe no taxes for 2015, come year's end.

Assuming those reports were either inaccurate, incomplete or both, the News-Register sought confirmation from Sen. Brian Boquist, R-Dallas, who in turned verified the facts Friday afternoon with Oregon Legislative Revenue Officer Paul Warner. Warner verified that the kicker rebates will be based on taxes paid on income earned in 2014, not 2015.

At this point, reports out of Salem indicate Oregonians will receive $473 million in tax credits or rebates on their 2015 returns when they file them early next year. That number is subject to change based on continuing state financial analysis, though. Officials don't expect to have a firm figure until August.

The controversial state income tax kicker is activated when the state's personal income tax receipts exceed the official forecast by more than 2 percent. When that occurs, the entire surplus is returned to taxpayers, under terms of a constitutional amendment approved by voters in 1980.

For many years, the money was returned to taxpayers by check, which proved a cumbersome and costly undertaking. The 2011 Legislature changed the law to provide a tax credit on a future income tax filing.

This week, The Oregonian reported:

“The money would be distributed as a credit on the state income taxes that you file in 2016 on this year's income. So if you don't pay any income taxes next year, you won't receive a credit — even if you paid a lot this year. And the reverse is true. If you pay state income taxes next year, you'll get a credit even if you paid nothing this year.”

But the tax credit actually is applied to taxes paid on income earned in 2014, on a percentage basis, Boquist confirmed.

“The Department of Revenue likely will have a line of the 2015 tax form that calculates a percentage of taxes a person paid in taxes in 2014,” the senator said. “When people submit their 2015 tax return in 2016, the credit is applied. If there is a refund due, then a refund check will be issued.”

A taxpayers filing a 2015 return will get an actual refund if his or her tax credit from 2014 exceeds what is owed for 2015. So instead of having to write a check, he will get to cash one instead.

That is the most important elements to understand, Boquist said. That's because it means people due a kicker rebate on their 2014 taxes will have to file a 2015 tax return, even if they don’t owe any state taxes for 2015.

Statewide reports disseminated by The Associated Press described the tax credit situation in more general terms, thus avoiding The Oregonian's error. However, they did not make it clear that Oregonians who don’t owe 2015 taxes need to file 2015 returns anyway to collect any kicker money they might be due.

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