The OR-WC in Box 14 of your Oregon W-2 is the amount your employer withheld for your share of the state’s Workers’ Benefit Fund (WBF) assessment. For 2026, that share is 0.9 cents for every hour you worked.1Oregon Department of Consumer and Business Services. Workers’ Compensation and Workers’ Benefit Fund Assessment Rates for 2026 The dollar figure is small, but it belongs on your Oregon return as a subtraction from income, and you can claim it whether or not you itemize.
What the Assessment Is
The Workers’ Benefit Fund is paid for by per-hour assessments split between Oregon workers and their employers. Oregon law requires every employer to withhold the employee’s half from wages and match it.2OregonLaws. ORS 656.506 – Assessments for Programs Some employers voluntarily cover the whole assessment themselves, so if your W-2 shows no OR-WC line, that may be why.
Payroll systems label the deduction differently. You might see “OR-WC,” “OR WBF,” or a similar abbreviation. They all point to the same assessment.
How the Number on Your W-2 Was Calculated
The assessment runs on actual hours worked, not hours paid. Overtime, required training, new-employee orientation, and paid travel time count. Vacation, sick, holiday, on-call, and standby hours do not.3Oregon.gov. Workers’ Benefit Fund (WBF) Assessment
For 2026 the total rate is 1.8 cents per hour or partial hour, with your employer paying at least half and withholding up to the other half.1Oregon Department of Consumer and Business Services. Workers’ Compensation and Workers’ Benefit Fund Assessment Rates for 2026 A full-time schedule of 2,080 hours produces a maximum employee share of roughly $18.72 for the year. Part-time and overtime workers see proportional amounts.
Claiming the Oregon Subtraction
This is where the OR-WC amount actually saves you money. The employee share of the WBF assessment qualifies as a subtraction from your Oregon income, reducing your state taxable income dollar for dollar. It’s not an itemized deduction — it’s an adjustment to income, so it’s available even if you take the standard deduction on both your federal and Oregon returns.4Oregon Department of Revenue. Form OR-40 Instructions
To claim it, report the OR-WC amount on Schedule OR-ASC (Oregon Additions, Subtractions, and Credits). The total from that schedule flows to Line 13 of Form OR-40.4Oregon Department of Revenue. Form OR-40 Instructions The subtraction isn’t automatic. You have to enter it yourself.
Tax software usually handles this correctly once you enter your Box 14 information and pick the right category. Look for “OR Workers’ Benefit Fund” or “OR-WC” in the dropdown. If you file by hand, this is one of the easiest lines to overlook on an Oregon return, precisely because the amount feels trivial.
Federal Tax Treatment
The IRS treats mandatory contributions to state benefit funds, including Oregon’s WBF, as deductible state taxes when you itemize on Schedule A. The amount goes on Line 5a alongside your state income tax withholding.5Internal Revenue Service. Instructions for Schedule A (Form 1040) If you take the standard deduction, the OR-WC amount provides no federal benefit.
For itemizers, the State and Local Tax deduction is capped. Under the Working Families Tax Cut Act (part of the One Big Beautiful Bill), the 2026 SALT cap is $40,400 for most filers and $20,200 for married filing separately, with a phase-out starting at modified adjusted gross income of $505,000 ($252,500 if married filing separately) that can never push the cap below $10,000.6Internal Revenue Service. Topic No. 503, Deductible Taxes The OR-WC amount counts toward that total along with your state income tax and property taxes, though it’s rarely large enough to change the outcome.
Don’t Confuse OR-WC With ORSTT
Oregon employees often see a second Box 14 code called “ORSTT” or “ORSTTW,” the Oregon Statewide Transit Tax. That one is a percentage of your wages (0.1% through at least part of 2026), not a per-hour assessment. The legislature passed an increase to 0.2% beginning in 2026, pending the outcome of a ballot referral.7Oregon Department of Revenue. Statewide Transit Tax
The two entries have different tax treatment. When you enter Box 14 data in tax software, categorize each code separately. Lumping them together, or picking the wrong label, can cause errors on both your federal and Oregon returns.
If You Already Filed Without Claiming It
You can file an amended Oregon return to add the WBF subtraction. Use the same software you originally filed with, or download Form OR-40 and the instruction booklet for the tax year you need to fix, check the “Amended Return” box on the first page, include a brief description of the change, and attach your federal return with all schedules.8Oregon Department of Revenue. Amending Your Income Tax Return You can file electronically through Direct File Oregon if you qualify, or mail the return to the Oregon Department of Revenue at PO Box 14700, Salem, OR 97309-0930.
For most workers the resulting refund will be a few dollars at most. If you’re already amending for another reason, adding this subtraction takes about thirty seconds.