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Federal Small Employer Q & A
Does Oregon have a Small Employer's Annual Tax Return like the IRS?
 
No.  By statute, employers are required to file their tax liability on a quarterly basis with the Oregon Department of Revenue (DOR).  Statute also requires employers to make their Oregon withholding (WH) payments no later than their federal payments.  For those employers instructed by the IRS to file Form 944 and deposit annually, we ask that you voluntarily deposit your Oregon WH payment quarterly.  However, if you wish to file your Oregon return quarterly, but deposit your WH payment annually and not be penalized, you must submit a request to DOR with a copy of your IRS notification.
 
Why doesn't Oregon just implement an annual Small Employer Annual Payroll Report?
 
The five different payroll programs administered on the Form OQ are governed by separate Oregon laws that specify the frequency and manner that the taxes are filed and paid.  Those laws would have to be changed before the tax programs could be administered any differently then they are now.
 
Can I pay all the Oregon payroll taxes annually?
 
No.  Generally, payments for Employment Tax, Workers' Benefit Fund Assessment (WBF), TriMet Transit Tax, and Lane Transit Tax are due quarterly and should be paid when you file your quarterly payroll tax return (Form OQ).  Unless you qualify as an agricultural or domestic employer, you will be expected to pay non-withholding taxes quarterly.
 
How will DOR know not to penalize my business for paying WH annually?
 
If a small employer plans to pay their federal and Oregon WH annually, they will need to notify DOR and provide a copy of the IRS notification qualifying them for the new Employers' Annual Federal Tax Program (Form 944).  Notification to DOR should be made as early as possible, but no later than 30 days after the employer is notified by the Oregon Department of Revenue that their payment is due.
 
Do I have to submit documentation every quarter?
 
No.  The information is good for the remaining quarters in the current calendar year.
 
If I choose to pay the Oregon WH annually, what payment coupon should I use?
 
You should include your annual WH payment on the coupon you mark for the fourth (4th) quarter.  Include your small employer annual WH payment with your fourth quarter payment for Employment, WBF, or Transit.