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Estimated tax

Who must pay

Oregon law requires some taxpayers to pay estimated tax. Oregon’s estimated tax system is similar
to the federal system, but when you figure estimated tax for Oregon:
  • Use Oregon income tax laws and tax rates.
  • Do not include Social Security tax (FICA), self-employment tax, or household employment tax.
In most cases, you must make estimated tax payments if you expect to owe $1,000 or more when you file your 2015 Oregon income tax return. That’s tax you owe after you subtract your credits and the tax withheld from your income, but before you subtract any 2014 refund you applied to your 2015 estimated tax.

Pay estimated tax for tax year 2015 if:
You expect to owe $1,000 or more when you file your 2015 Oregon income tax return, and you estimate the total income tax withholding will be less than:
  • 100 percent of the tax shown on your 2014 income tax return that covered all 12 months of the year, or 
  • 90 percent of the tax to be shown on your 2015 income tax return, or
  • 90 percent of the tax on your 2015 annualized income.
Even if you expect to owe less than $1,000, you may still make estimated tax payments.

For more information on how to figure your estimated payments and how to obtain payment vouchers, please visit our website or call us.

Note: Estimated tax payments are not a substitute for withholding Oregon income tax from wage income.
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Farmers and commercial fishermen

Farmers and fishermen are not required to pay estimated tax if at least two-thirds of their 2014 gross
income or two-thirds of their 2015 estimated gross income from all sources is from farming or fishing.
This includes oyster farming. Enter Exception #1 on your tax return. Don’t use Form 10.

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Nonresidents and part-year residents

Nonresidents figure Oregon estimated tax only on income that is:

  • Subject to Oregon withholding, or
  • From conducting a trade or business within Oregon.
  • Single ticket Oregon lottery winnings greater than $600.

S corporation, limited liability company (LLC), or partnership income

If you’re a shareholder in an S corporation, a member of an LLC, or in a partnership with income from Oregon sources, you may need to make estimated tax payments.

Part-year residents. For the part of the year you were a nonresident, you are subject to Oregon tax on your share of the Oregon income reported by the S corporation, LLC, or partnership. Partners must also report guaranteed payments. For the part of the year you were a resident, you’re subject to Oregon tax on your share of all the S corporation, LLC, or partnership income.

Nonresidents. You’re subject to Oregon tax on your share of the Oregon income reported by the S
corporation, LLC, or partnership. You’re also subject to Oregon tax on any guaranteed payments from the partnership. The payments are apportioned using the partnership’s percentage.

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Retirees

If you’re retired or will soon retire, you may need to make estimated tax payments. Or, you may be able to have Oregon income tax withheld from your retirement income. Contact the payer of the income to see if this is possible.

Retirees who are Oregon residents but not living in Oregon may be subject to tax on their Oregon-source pensions. This law applies to retirees who still have Oregon as their domicile but file as nonresidents.
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Nonresident aliens

Estimated tax filing requirements are the same for both United States citizens and nonresident aliens. Nonresident aliens can be either Oregon residents or nonresidents. If you or your spouse/RDP are a nonresident alien, you must file separate estimated tax forms.

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Fiduciaries

Do not file Form 40-ESV. You do not need to pay estimated tax on behalf of an estate or trust.

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