2021 Oregon Revised Statutes
Volume : 08 - Revenue and Taxation
Chapter 315 - Personal and Corporate Income or Excise Tax Credits
Section 315.264 - Working family household and dependent care expenses; rules.
(1)(a) A credit against the tax otherwise due under ORS chapter 316 shall be allowed a taxpayer in an amount equal to a percentage of employment-related expenses of a type allowable as a credit pursuant to section 21 of the Internal Revenue Code, notwithstanding the limitation imposed by section 21(c) of the Internal Revenue Code, and limited as provided in paragraph (c) of this subsection.
(b) The credit allowed under this section may be claimed for expenses for care of a qualifying individual that allow a nonmarried taxpayer to seek employment or to attend school as a degree-seeking student enrolled on a full-time or part-time basis.
(c) The employment-related expenses for which a credit is claimed under this section may not exceed the least of:
(A) The combination of earned income taxable by Oregon and reportable on the taxpayer’s return and imputed income;
(B) The lesser amount, attributable to either spouse, of the combination of the spouse’s imputed income and the spouse’s earned income subject to taxation by Oregon, if reportable on a joint return; or
(C) $12,000 for a taxpayer for which there is one qualifying individual, or $24,000 for a taxpayer for which there are two or more qualifying individuals.
(d) The limitations in paragraph (c)(C) of this subsection shall be reduced by the aggregate amount excludable under section 129 of the Internal Revenue Code for the tax year.
(2) The applicable percentage described in subsection (1) of this section shall be determined in accordance with the following table:
______________________________________________________________________________
Greater of Federal
or Oregon Adjusted
Gross Income, as Applicable percentage based on age of youngest
Percentage of Federal qualifying individual on January 1 of tax year
Poverty Level
______________________________________________________________________________
At least 6 years
but less than
At least 13, or at least
3 years 13 but less 18 years or
Greater Less than Under 3 but less than 18 if older if
than or equal to years than 6 disabled disabled
0% 10% 10% 8% 5% 5%
10% 20% 20% 18% 15% 5%
20% 30% 30% 28% 25% 10%
30% 40% 40% 38% 35% 20%
40% 50% 50% 48% 45% 30%
50% 60% 55% 53% 50% 35%
60% 70% 60% 58% 55% 40%
70% 80% 65% 63% 60% 45%
80% 90% 70% 68% 65% 50%
90% 110% 75% 73% 70% 55%
110% 120% 71% 69% 66% 50%
120% 130% 66% 64% 61% 45%
130% 140% 61% 59% 56% 39%
140% 150% 55% 53% 50% 33%
150% 160% 50% 48% 45% 28%
160% 200% 47% 45% 42% 25%
200% 210% 45% 43% 40% 22%
210% 220% 40% 38% 35% 20%
220% 230% 35% 33% 30% 15%
230% 240% 30% 28% 25% 10%
240% 250% 20% 18% 15% 5%
250% 260% 10% 8% 5% 5%
260% 280% 6% 6% 4% 4%
280% 300% 4% 4% 4% 4%
300% - 0% 0% 0% 0%
______________________________________________________________________________
(3) The applicable percentage for a household in excess of eight members shall be calculated as if for a household size of eight members.
(4) The credit under this section is not allowed to a taxpayer with federal adjusted gross income or Oregon adjusted gross income, whichever is greater, in excess of 300 percent of the federal poverty level.
(5) For the purposes of calculating the allowed amount of credit applicable to a student:
(a) Imputed income shall equal $1,000 per qualified month per student for a student for whom there is one qualifying individual, or $2,000 per qualified month per student for a student for which there are two or more qualifying individuals.
(b) A qualified month is any month in which the student is a full-time or part-time student and attending school, or a summer month in a calendar year in which the student was enrolled in a degree-seeking program in both the spring and fall academic terms.
(c) The school ratio shall equal 100 percent for a month for which a student is qualified for student financial aid as a full-time student, and 70 percent for a month for which a student is qualified for student financial aid as a part-time student.
(d) If a student is a part-time student for a portion of the year and a full-time student for the balance of the year, the credit shall be prorated. The school ratio applicable to the summer months, if any, shall be the school ratio applicable to the immediately preceding spring month.
(6) Notwithstanding subsections (2) and (3) of this section, for a student with adjusted gross income as a percentage of the federal poverty level that is less than or equal to 110 percent, the amount of credit shall be the greater of:
(a) The credit calculated using subsection (2) of this section; or
(b) The product of the applicable percentage, as shown in subsection (2) of this section, corresponding to an adjusted gross income percentage of 110 percent, multiplied by:
(A) The lesser of expenses for care of a qualifying individual or imputed income; and
(B) The school ratio.
(7) In order to ensure compliance with the eligibility requirements of the credit allowed under this section, the Department of Revenue shall be afforded access to utilization data maintained by the Department of Human Services in its administration of the Employment Related Day Care program.
(8) The Department of Revenue may assess a penalty in an amount not to exceed 25 percent of the amount of credit claimed by the taxpayer against any taxpayer who knowingly claims or attempts to claim any amount of credit under this section for which the taxpayer is ineligible, or against any individual who knowingly assists another individual in claiming any amount of credit for which the individual is ineligible.
(9) The Department of Revenue may adopt rules for carrying out the provisions of this section and prescribe the form used to claim a credit and the information required on the form.
(10) A nonresident individual shall be allowed the credit computed in the same manner and subject to the same limitations as the credit allowed a resident by subsection (1) of this section. However, the credit shall be prorated using the proportion provided in ORS 316.117.
(11) If a change in the taxable year of a taxpayer occurs as described in ORS 314.085, or if the Department of Revenue terminates the taxpayer’s taxable year under ORS 314.440, the credit allowed by this section shall be prorated or computed in a manner consistent with ORS 314.085.
(12) If a change in the status of a taxpayer from resident to nonresident or from nonresident to resident occurs, the credit allowed by this section shall be determined in a manner consistent with ORS 316.117.
(13) If the amount allowable as a credit under this section, when added to the sum of the amounts allowable as payment of tax under ORS 316.187 or 316.583, other tax prepayment amounts and other refundable credit amounts, exceeds the taxes imposed by ORS chapters 314 and 316 for the tax year after application of any nonrefundable credits allowable for purposes of ORS chapter 316 for the tax year, the amount of the excess shall be refunded to the taxpayer as provided in ORS 316.502.
(14) Any amount that is refunded to the taxpayer under this section and that is in excess of the tax liability of the taxpayer does not bear interest. [2015 c.701 §3; 2017 c.638 §2; 2018 c.111 §7; 2021 c.525 §5a]
Note: The amendments to 315.264 by section 75, chapter 631, Oregon Laws 2021, become operative July 1, 2023. See section 78, chapter 631, Oregon Laws 2021. The text that is operative on and after July 1, 2023, is set forth for the user’s convenience.
(1)(a) A credit against the tax otherwise due under ORS chapter 316 shall be allowed a taxpayer in an amount equal to a percentage of employment-related expenses of a type allowable as a credit pursuant to section 21 of the Internal Revenue Code, notwithstanding the limitation imposed by section 21(c) of the Internal Revenue Code, and limited as provided in paragraph (c) of this subsection.
(b) The credit allowed under this section may be claimed for expenses for care of a qualifying individual that allow a nonmarried taxpayer to seek employment or to attend school as a degree-seeking student enrolled on a full-time or part-time basis.
(c) The employment-related expenses for which a credit is claimed under this section may not exceed the least of:
(A) The combination of earned income taxable by Oregon and reportable on the taxpayer’s return and imputed income;
(B) The lesser amount, attributable to either spouse, of the combination of the spouse’s imputed income and the spouse’s earned income subject to taxation by Oregon, if reportable on a joint return; or
(C) $12,000 for a taxpayer for which there is one qualifying individual, or $24,000 for a taxpayer for which there are two or more qualifying individuals.
(d) The limitations in paragraph (c)(C) of this subsection shall be reduced by the aggregate amount excludable under section 129 of the Internal Revenue Code for the tax year.
(2) The applicable percentage described in subsection (1) of this section shall be determined in accordance with the following table:
______________________________________________________________________________
Greater of Federal
or Oregon Adjusted
Gross Income, as Applicable percentage based on age of youngest
Percentage of Federal qualifying individual on January 1 of tax year
Poverty Level
______________________________________________________________________________
At least 6 years
but less than
At least 13, or at least
3 years 13 but less 18 years or
Greater Less than Under 3 but less than 18 if older if
than or equal to years than 6 disabled disabled
0% 10% 10% 8% 5% 5%
10% 20% 20% 18% 15% 5%
20% 30% 30% 28% 25% 10%
30% 40% 40% 38% 35% 20%
40% 50% 50% 48% 45% 30%
50% 60% 55% 53% 50% 35%
60% 70% 60% 58% 55% 40%
70% 80% 65% 63% 60% 45%
80% 90% 70% 68% 65% 50%
90% 110% 75% 73% 70% 55%
110% 120% 71% 69% 66% 50%
120% 130% 66% 64% 61% 45%
130% 140% 61% 59% 56% 39%
140% 150% 55% 53% 50% 33%
150% 160% 50% 48% 45% 28%
160% 200% 47% 45% 42% 25%
200% 210% 45% 43% 40% 22%
210% 220% 40% 38% 35% 20%
220% 230% 35% 33% 30% 15%
230% 240% 30% 28% 25% 10%
240% 250% 20% 18% 15% 5%
250% 260% 10% 8% 5% 5%
260% 280% 6% 6% 4% 4%
280% 300% 4% 4% 4% 4%
300% - 0% 0% 0% 0%
______________________________________________________________________________
(3) The applicable percentage for a household in excess of eight members shall be calculated as if for a household size of eight members.
(4) The credit under this section is not allowed to a taxpayer with federal adjusted gross income or Oregon adjusted gross income, whichever is greater, in excess of 300 percent of the federal poverty level.
(5) For the purposes of calculating the allowed amount of credit applicable to a student:
(a) Imputed income shall equal $1,000 per qualified month per student for a student for whom there is one qualifying individual, or $2,000 per qualified month per student for a student for which there are two or more qualifying individuals.
(b) A qualified month is any month in which the student is a full-time or part-time student and attending school, or a summer month in a calendar year in which the student was enrolled in a degree-seeking program in both the spring and fall academic terms.
(c) The school ratio shall equal 100 percent for a month for which a student is qualified for student financial aid as a full-time student, and 70 percent for a month for which a student is qualified for student financial aid as a part-time student.
(d) If a student is a part-time student for a portion of the year and a full-time student for the balance of the year, the credit shall be prorated. The school ratio applicable to the summer months, if any, shall be the school ratio applicable to the immediately preceding spring month.
(6) Notwithstanding subsections (2) and (3) of this section, for a student with adjusted gross income as a percentage of the federal poverty level that is less than or equal to 110 percent, the amount of credit shall be the greater of:
(a) The credit calculated using subsection (2) of this section; or
(b) The product of the applicable percentage, as shown in subsection (2) of this section, corresponding to an adjusted gross income percentage of 110 percent, multiplied by:
(A) The lesser of expenses for care of a qualifying individual or imputed income; and
(B) The school ratio.
(7) In order to ensure compliance with the eligibility requirements of the credit allowed under this section, the Department of Revenue shall be afforded access to utilization data maintained by the Department of Early Learning and Care in its administration of the Employment Related Day Care subsidy program.
(8) The Department of Revenue may assess a penalty in an amount not to exceed 25 percent of the amount of credit claimed by the taxpayer against any taxpayer who knowingly claims or attempts to claim any amount of credit under this section for which the taxpayer is ineligible, or against any individual who knowingly assists another individual in claiming any amount of credit for which the individual is ineligible.
(9) The Department of Revenue may adopt rules for carrying out the provisions of this section and prescribe the form used to claim a credit and the information required on the form.
(10) A nonresident individual shall be allowed the credit computed in the same manner and subject to the same limitations as the credit allowed a resident by subsection (1) of this section. However, the credit shall be prorated using the proportion provided in ORS 316.117.
(11) If a change in the taxable year of a taxpayer occurs as described in ORS 314.085, or if the Department of Revenue terminates the taxpayer’s taxable year under ORS 314.440, the credit allowed by this section shall be prorated or computed in a manner consistent with ORS 314.085.
(12) If a change in the status of a taxpayer from resident to nonresident or from nonresident to resident occurs, the credit allowed by this section shall be determined in a manner consistent with ORS 316.117.
(13) If the amount allowable as a credit under this section, when added to the sum of the amounts allowable as payment of tax under ORS 316.187 or 316.583, other tax prepayment amounts and other refundable credit amounts, exceeds the taxes imposed by ORS chapters 314 and 316 for the tax year after application of any nonrefundable credits allowable for purposes of ORS chapter 316 for the tax year, the amount of the excess shall be refunded to the taxpayer as provided in ORS 316.502.
(14) Any amount that is refunded to the taxpayer under this section and that is in excess of the tax liability of the taxpayer does not bear interest.
Note: Section 5, chapter 701, Oregon Laws 2015, provides:
Sec. 5. (1) ORS 315.264 applies to tax years beginning on or after January 1, 2016, and before January 1, 2028.
(2) The amendments to ORS 315.264 by section 5a of this 2021 Act apply to tax years beginning on or after January 1, 2022, and before January 1, 2028.
[2015 c.701 §5; 2021 c.525 §5]
