More Credits For Oregon S Corps, Individuals

Oregon Gov. Kate Brown has signed legislation amending corporate excise (income) tax credits that can be claimed by S corporation owners and the Working Family Dependent Care tax credit.

S Corporation Credits

Specifically, the legislation removed the Department of Revenue’s rulemaking authority to determine if C corporation tax credits can be claimed by S corporation shareholders. Further, “business tax credits” now include:

  • employee and dependent scholarships,
  • individual development accounts,
  • film production development contributions,
  • university venture development funds,
  • low income community jobs initiative,
  • Trust for Cultural Development Account contributions,
  • loans for affordable housing,
  • long term enterprise zone facilities,
  • loans for agriculture workforce housing,
  • qualified research expenses,
  • alternative qualified research expenses, and
  • alternative fuel vehicle contribution.

Dependent Care Credit

In tax years beginning January 1, 2018, nonmarried taxpayers seeking work or going to school may take Oregon the dependent care tax credit. Taxpayers can claim the credit for employment-related expenses that do not exceed the lesser of:

  • the taxpayer’s Oregon income; or
  • $12,000 for a taxpayer with one qualifying individual/$24,000 for a taxpayer with two or more qualifying individuals.

However, the new limits will be reduced by the amount of dependent care paid with pre-tax dollars under IRC §129.

Lastly, taxpayers who do not report earned income that is taxable by Oregon cannot take the credit.

S.B. 162, Laws 2017, effective on 91st day following adjournment sine die

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