The Oregon Department of Revenue began processing state income tax returns on Friday, Feb. 12.
Returns will be processed in the order they are received, with the first refunds sent out on Tuesday, Feb. 16. According to the Oregon Department of Revenue, the fastest way to get a refund is by filing returns electronically and providing information for a direct deposit.
The department cautioned in a news release that federal stimulus checks, unemployment benefits and federal tax law changes related to COVID-19 may impact the way taxpayers file their returns compared to previous years.
In Oregon, for example, when calculating their federal tax subtraction based on the amount of federal taxes they paid the previous year, filers are directed to reduce the amount of federal tax they report paying by the amount of money they received in stimulus checks during 2020.
Unemployment benefits in Oregon are also taxable, including benefits received through the Pandemic Unemployment Assistance program, and unlike W-2 wages, the state does not automatically withhold taxes from those checks upfront.
“For individuals still receiving unemployment benefits in 2021, the department urges recipients to submit Form 1040WH to the Oregon Employment Department to authorize withholding,” a news release stated.
While many Oregonians worked from home for at least part of 2020, due to the federal Tax Cuts and Jobs Act of 2017, employees who receive their wages exclusively from an employer and not a business they own will not be eligible for the business use of home deduction. The act also suspended the deduction for unreimbursed employee business expenses through 2025.
The Oregon Department of Revenue has penalty waivers available for taxpayers unable to pay their taxes in full because they were impacted by COVID-19, wildfires or wind storms. Information about those relief options can be found at oregon.gov/dor/Pages/COVID19.aspx.