What is new?
Starting in tax year 2024 you are now able to apply part or all of your Pass-Through Entity Elective (PTE-E) Tax refund from your filed return to the next tax year as an estimated payment.
About the tax
In July 2021, Oregon created a new tax called the Pass-Through Entity Elective (PTE-E) Tax, a business alternative income tax. This tax was made in response to the $10,000 cap on the federal State and Local Tax (SALT) deduction in the 2017 federal Tax Cuts and Jobs Act.
For tax years beginning on or after January 1, 2022, entities taxed as S corporations and partnerships may elect annually to be subject to the PTE-E tax at a rate of 9 percent tax on the first $250,000 of distributive proceeds and 9.9 percent tax on any amount exceeding $250,000. The law will expire if the federal SALT deduction limitation expires or is repealed.
Qualifying members of an electing PTE are eligible for a credit equal to 100 percent of the member's distributive share of the PTE-E tax paid.
Training
Learn how to register with us in Revenue Online, this is the first step you must take if you plan to participate in the PTE-E Tax. Then learn about the PTE-E Tax and how to file a PTE-E Tax return.
Getting started
Register on Revenue Online
If you plan to participate in the PTE-E Tax, you must first register with us to make payments through Revenue Online.
Estimated Payment Deadlines
Estimated payments are due April 15, June 15, September 15, and January 15 after the tax year ends. If you do not make estimated payments the pass-through entity (PTE) may owe underpayment interest when it files the PTE-E Tax return (Form OR-21). Be sure you select the correct payment type when making your payment. Select “Estimated Payment – Apply to upcoming tax due."
Annual Election for PTE-E Tax Participation
To participate in the PTE-E Tax, you must elect annually by filing the Form OR-21 by the due date including extensions. Returns are due by April 15, or by the extension due date October 15, if requested. Returns filed after the due date will not be accepted. If no return is filed, no election has been made and qualifying members will not receive a credit.
Electronic Filing Requirements
Returns can only be filed electronically either through Revenue Online or an approved software vendor. Your software vendor must be approved by the department for electronic filing. You can see the
approved list here. If your software vendor does not support Form OR-21, you will have to file via Reveune Online. Paper returns will not be accepted. Please ensure in your software that an electronic return is submitted by the due date.
Exceptions for Electronic Filing
If you are unable to file online or electronically, please email us to see if you qualify for an exception.
Issuing OR-21-K-1 to Members
Entities who elect to participate must file returns before issuing the OR-21-K-1 to members to claim the credit on their individual returns. If the OR-21-K-1s are issued prior to filing the entity return the department may disallow the credits on the individual returns.
Refund Request for Non-Participation
If you have made estimated payments and you decide not to elect to participate or you don't file a return by the due date, including extensions, you will need to make an online request for the department to refund your estimated payments through Revenue Online. If your payment type was not correctly selected when you made the payment (Estimated Payment – Apply to upcoming tax due) your request may take longer to process.
Frequently asked questions