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Oregon Withholding Tax FAQs
What are the withholding tables?
Withholding tables are a set of guidelines employers use to determine the amount of tax to withhold from gross wages to satisfy personal income tax owed on those wages. The withheld amount is sent to us on behalf of the employee.

Does statute require you to regularly review withholding tables?
Statute does require that we provide tables so that the amount withheld is as close as practicable to the amount of tax required for the earnings. We review our withholding formulas and tables regularly to be sure that we continue to meet this standard. The current changes will take effect January 1, 2011.

Which taxpayers will be affected by this change?
Wage earners who earn less than $50,000 annually and those who earn more than $125,000 annually (these numbers apply to single filers; for joint filers double these amounts).

Does this mean that some Oregonians are going to have to pay more taxes than they expected?
No. The withholding tables don’t affect the amount of tax someone has to pay. It affects when they pay it. We made the changes so that taxpayers will have appropriate amounts withheld from their wages throughout the year. That way, they won’t have to make an unexpected payment when they file their tax returns.

What change did DOR make?
We changed the formula to get more accurate withholding. The changes will affect the two wage categories mentioned above more than anyone else. Our current tables were not withholding enough Oregon tax because the allowance in our formulas for Federal tax estimates and the federal tax subtraction wasn’t accurate for taxpayers with wages below $50,000. We fixed this so that those taxpayers will have enough Oregon tax withheld. For those earning more than $125,000, the changes were due to Measure 66, which added a new tax rate for income higher than this amount.

Will there be many taxpayers who will have to “make an unexpected payment” when they file their 2010 tax returns?
The changes we’ve made to the tables will start January 1, 2011 and apply to taxes withheld for the 2011 tax year. A small number of taxpayers may not have enough withholding for the 2010 tax year, under our old tables.

How do you make the adjustments to the withholding tables?
We adjust the formulas based on changes to tax law. We generate and publish the tables so employers can implement the changes. Employers and payroll companies check with us regularly.

How frequently do you typically adjust the withholding tables?
We review the tables each year to make sure they are still appropriate. We only adjust them when necessary to meet the standard in the law that the tables provide for the correct amount of withholding.  The last time we adjusted them was January 1, 2007.