Oregon Tax Kicker: How It Works, Who Qualifies, and How to Claim

The Oregon tax kicker is a constitutional refund that returns surplus state revenue to personal income taxpayers whenever actual collections exceed the official forecast by at least 2%. For 2025 Oregon returns filed in 2026, the kicker takes the form of a credit equal to 9.863% of your 2024 Oregon tax liability before credits.¹

How the Kicker Works

Article IX, Section 14 of the Oregon Constitution requires the state to compare its revenue forecast for each two-year budget cycle against the amount actually collected. When personal income tax revenue comes in more than 2% above the forecast, the entire overshoot goes back to taxpayers as a credit on their next Oregon return, not just the portion above the 2% line.²

The Department of Revenue calculates a single kicker percentage by dividing the total surplus by the total personal income tax liability for all eligible filers. That percentage is then applied to each individual’s prior-year tax liability to produce the credit.³ For the 2025 return, that percentage is 9.863%.

Who Qualifies for the 2025 Kicker

Three conditions all have to be met:

You filed a 2024 Oregon return. Full-year residents use Form OR-40, part-year residents use Form OR-40-P, and nonresidents use Form OR-40-N.
You had an Oregon tax liability for 2024. You needed to owe tax before any credits were applied. If your tax before credits was zero, you don’t qualify even if you filed.
You file a 2025 Oregon return. The credit is claimed on that return, so you have to file one even if you otherwise wouldn’t need to.³

If you moved out of Oregon after 2024, you can still qualify as long as your 2024 Oregon return showed tax due before credits and you file the appropriate 2025 part-year or nonresident return.

File the Base-Year Return First

If you file your 2025 return before your 2024 return has been filed and processed, the Department of Revenue won’t apply the kicker until the 2024 return clears. Anyone behind on their 2024 filing should get it in as soon as possible so the credit isn’t held up.³

If the Taxpayer Has Died

If an eligible taxpayer dies before filing a 2025 return, the credit still gets claimed. A surviving spouse can claim the full kicker on a joint return. Otherwise, the deceased person’s personal representative files a 2025 return on their behalf.³

How Much Your Kicker Will Be

Multiply your 2024 Oregon tax before credits by 0.09863. On the 2024 Form OR-40, that figure is on line 24.⁴ On Form OR-40-P and Form OR-40-N, use the corresponding tax-before-credits line.

Some examples: a 2024 Oregon tax before credits of $5,000 produces a kicker of about $493. A $12,000 tax liability produces about $1,184. The credit scales directly with what you paid.

The Department of Revenue also runs an online calculator called “What’s My Kicker?” on its Revenue Online portal. You enter your Social Security number or ITIN along with your 2024 and 2025 filing statuses, and the tool returns your specific credit amount.³

How to Claim It

The kicker is a credit on your 2025 Oregon return, not a separate check. You enter it on the line designated for the Oregon surplus credit, and the form instructions include a worksheet. Because it is refundable, any amount larger than your 2025 tax liability comes back to you in your refund.³

Offsets for Debts You Owe

Before any refund reaches you, the Department of Revenue checks for state debts. Unpaid Oregon taxes, overdue child support, and defaulted state-held student loans are paid out of the refund first. You’ll get a Notice of Refund Offset explaining what was applied and to which debt, and only the remainder is sent to you.⁵

Is the Kicker Federally Taxable?

Oregon does not tax the kicker, but the IRS treats it like any other state income tax refund. If you itemized deductions on a prior federal return and claimed Oregon state income taxes, part or all of the kicker may count as federal taxable income under the tax benefit rule. If you took the federal standard deduction for the relevant year, the kicker generally isn’t federally taxable, because deducting state taxes gave you no federal benefit.

The Department of Revenue issues a Form 1099-G in the year after the kicker is credited, reporting the full amount. The federal return instructions walk through how much, if any, to include in income. When part of the kicker does end up on your federal return, Oregon lets you subtract that amount on your state return so the same money isn’t taxed twice.³

A large kicker can produce an unexpected federal tax bill the following spring. Adjusting withholding or setting aside part of the credit avoids the surprise.

Donating Your Kicker to Oregon Schools

You can give the credit to the Oregon State School Fund for K-12 public education by checking the designated box on your return. It’s all or nothing; partial donations aren’t allowed through this election.³

If you check the box and change your mind, you can amend your return, but only before the filing deadline including extensions. After that, the election is locked. The Department of Revenue will still issue a 1099-G for the full kicker amount even if you donate it, so the federal tax rules above may still apply.³

A Note on the Corporate Kicker

Only individual filers get a check or credit from the kicker. Under a 2012 constitutional amendment approved by Oregon voters, any corporate income and excise tax surplus that exceeds the forecast by 2% or more is directed to K-12 public education through the General Fund rather than returned to corporations.² If you own a C corporation, there is no kicker credit coming back to the business.

1
Oregon Department of Revenue. Revenue Surplus Confirmed Taxpayers to Receive Kicker Credit on 2025 Oregon Tax Returns Next Year
2
FindLaw. Oregon Constitution Art. IX Sect. 14
3
Oregon Department of Revenue. Oregon Surplus (“Kicker”)
4
Oregon Department of Revenue. 2024 Form OR-40, Oregon Individual Income Tax Return for Full-year Residents
5
Oregon Department of Revenue. Offsets