No. Only self employment activities that result in greater than $400 of net earnings for each business activity must be reported.
Yes. See the summary below:
- Consultants—See Services (#12).
- Director's fees—See Services (#12).
- Farmers—Taxable the same as any other business. Farm income is subject to tax to the extent that sales of farm products are within the district. Farmers with sales both in and out of the district use apportionment.
- Fiscal Year Filers—When a partnership tax year ends within a calendar year, the partnership files on a calendar year basis with the return due the following April 15.
- Insurance Agents—Exempt for insurance related income only. Noninsurance-related self-employment activities (consulting, investment advice, etc.) are taxable.
- Manufacturers—Taxable on income earned in the district. Businesses with activities and sales both inside and outside the district use apportionment.
- Ministers—Exempt for compensation received for religious services. Compensation received for independent contract services (weddings, funerals, etc.) is taxable.
- Partnerships—The partnership may file one return for all partners, deducting one $400 exclusion for each partner. If individual partners have other transit district self-employment income they can't take the $400 exclusion again.
- Realtors—Realtors are sometimes treated as employees and
sometimes as self-employed, depending on their relationship to their
employers. If they're subject to federal self-employment tax, then
they're also subject to the transit district self-employment taxes.
Generally, if a realtor’s office is located within the transit district
and the realtor does the greater amount of work (more than 50%) for each
individual real estate sale in his or her office, then all of his or
her self-employed earnings are subject to the transit tax. The realtor
will not need to complete the apportionment worksheet when he or she
files their transit return. If the majority of a realtors time (more
than 50%) for each individual sale is spent outside of the transit
district then the realtor may apportion his or her earnings by using the
Apportionment Worksheet and will include this worksheet upon filing his
or her transit return. The realtor would need to keep track of the
amount of time spent working in and out of the district for each
- Rental Income—Not subject to tax unless you're a real estate dealer and your rental income is part of the business (IRC§1402(a)(1)).
- Royalties—See Services (#12).
- Services—Services are taxable if performed within the district boundary, non-taxable if performed outside of the boundary. If you perform services both inside and outside of the district, determination is made by whether most of the cost of performance is in or out of the district. Example 1: Mary is a consultant who lives in the district. She does most of her work at each customer's place of business. In this situation, services provided to customers outside the district are not taxable. Example 2: Same facts as Example 1 except that Mary does most of the work for each customer from her home. Since most of Mary's cost of performance for each customer is in the district, all services are taxable, even though some customers are outside the district.
- Truckers—See Services (#12). If you have no pick-ups or deliveries within the district boundaries but are only traveling through, then you're income isn't taxed.
- Writers—See Services (#12). If the majority of the cost of performance to create a book, article, etc., is within the district boundaries, then the income is taxable.
No. Each taxpayer having self-employment earnings must file a separate transit self-employment return. This is true even if you and your spouse filed a joint federal and state income tax return.
The only exception is a partnership filing for all of its members. Both spouses could be members of the same partnership and may be included on one transit return filed by the partnership.
Yes. You can file an amended transit return any time. Complete a transit tax return for the year being amended showing the correct numbers and making sure to check the "This is an amended return" box.
Refunds: Refunds are only issued within three years of the original return due date or filed date, whichever is greater.
No. You must file your transit return by mail. Include your federal Schedule SE, apportionment worksheets, and payment vouchers. Make a copy for your records, and mail your return to the Oregon Department of Revenue address printed at the bottom of the tax return.
Yes. You may net the gain of one business from which you have self-employment earnings against the loss of a separate business from which you have self-employment earnings. Please note this is a change of law interpretation and applies to any tax year that is still open for amendment.
Example: Business 1 has $10,000 of earned self-employment income. Business 2 has a $4,000 loss. On your Transit SE tax return, you may net the gain from Business 1 with the loss from Business 2 to report total self-employment income of $6,000 ($10,000 - $4,000).
No. You're not required to send estimated tax payments. However, if you send a payment separate from your return, make sure to include the correct voucher with your check or money-order.
If you get an extension to file your federal or Oregon individual income tax return, it will also extend your transit self-employment tax return. Check the Extension Filed box on your transit return. Don't include your extension but retain with your records.
Be sure to file your transit self-employment tax return within the extension period to avoid additional penalties.
File one return for each individual taxpayer. If you have separate business activities, attach a schedule for each separate business to your return.
No. We can't apply an income tax refund to pay your transit self-employment tax.
- C corporations (Incorporated businesses)
- S corporations (The distributive share)
- Ministers—applies only to compensation received for religious services.
- Insurance agents—applies only to insurance-related income.
You may apportion your self-employment earnings for those business activities that are both in and out of the district by using Form TSE-AP,Transit Self-Employment Tax Apportionment Worksheet, 150-500-051: Sales within the district divided by sales outside the district.
Most taxpayers will use sales factor only to apportion their income if their tax year begins after July 1, 2005. If you're filing for tax years before this date, refer to the instructions and forms for that particular tax year.
Exception: Taxpayers primarily engaged in utilities or telecommunications may elect to apportion net self-employment earnings using the double-weighted sales factor formula in OAR 150-314.280(3).
For those exceptions listed above, use Form TSE-AP to apportion your income and check the box on the transit self-employment tax return stating you meet that exception.
If changes are made that affect your self-employment earnings, file an amended return to report and pay any additional tax due. If the change reduces your transit tax, you have two years from the date of the audit report to amend and claim a refund.
The total exclusion for all of your self-employment earnings is limited to $400.
Individuals: Enter $400 or the amount of your self-employment earnings, whichever is less. An individual taxpayer may not claim more than a $400 exclusion on the transit self-employment tax return. If the exclusion was partially or completely used on another transit self-employment tax return filed by your partnership, you may only use the unused amount of the $400 exclusion.
Partnerships: Enter $400 for only those partners whose share of positive earnings are included in the net self-employment earnings on the transit self-employment tax return. If any partner's exclusion was partially or completely used on another transit self-employment tax return for that year, include only that partner's unused amount of the $400 exclusion. Each partner is responsible for ensuring that the total of all exclusions does not exceed $400.
This return is due the 15th day of the fourth month after the end of the fiscal year.
Exception: When a partnership tax year ends within a calendar year, the partnership files on a calendar year basis, with the return due the following April 15.
Your transit return is due the same day as your federal and Oregon individual income tax returns, usually April 15.
Forms and instructions are available on our website. These forms cannot be electronically filed at this time. Please print out and mail to the address on the return.
Self-employment earnings are included on your federal Schedule SE, line 3. This is the net amount of earnings that you will begin with on line 1 of your transit self-employment tax return.
The net self-employment earnings on your federal Schedule SE may include those earnings reported on your:
- Federal Schedule C or C-EZ; or
- Schedule F; or
- Schedule K-1 from a partnership return (Form 1065).
More time to file does not mean more time to pay. If you have an extension, you must make your payment by the original due date of the return to avoid a penalty and interest charge. Complete one of our payment vouchers and send it with your tax payment. For TriMet self-employment payments use Form TM-V, 150-555-172. For LTD self-employment payments use Form LTD-V, 150-560-172. Be sure to use the same name and Social Security number (SSN) or federal employer identification number (FEIN) you will use on your return when you file.