Oregon Residents to Receive $1.4 Billion “Kicker” Tax Refund

In a significant development for taxpayers in Oregon, the state has confirmed a $1.4 billion “kicker” tax refund that residents can claim when they file their 2025 state income tax returns in 2026. This is one of the largest refunds under Oregon’s unique tax law, which returns excess state revenue to taxpayers when actual collections exceed projections by more than 2 percent. This article presents all essential details, facts, figures, eligibility rules, calculations, timelines, and actions residents must know to benefit fully from this refund.

What Is Oregon’s “Kicker” Tax Refund?

The Oregon “kicker” tax refund is a constitutional provision that requires the state to return surplus revenue to taxpayers whenever actual state revenue exceeds forecasted revenue by at least 2 percent over a two-year budget period (biennium). The refund is not issued as a separate check automatically, but as a credit on the taxpayer’s Oregon personal income tax return.

For the 2023–2025 biennium, Oregon collected significantly more revenue than projected in its budget. As a result, the state confirmed a $1.41 billion revenue surplus, triggering a kicker refund that will be available to eligible taxpayers in the 2026 filing season.

Why Is the Kicker Triggered?

The kicker is triggered when the difference between actual state revenue and projected revenue exceeds 2 percent of the projection for the biennium. For the 2023–2025 period, Oregon’s Office of Economic Analysis confirmed that the revenue surplus crossed this threshold, making it eligible for refund distribution. This mechanism is designed to ensure that taxpayers do not pay more than needed into state coffers.

Who Is Eligible for the $1.4 Billion Refund?

To be eligible for the kicker refund in 2026:

• Taxpayers must have filed an Oregon personal income tax return for the tax year 2024.
• They must file an Oregon personal income tax return for the tax year 2025 in 2026, even if they otherwise have no filing requirement.
• Both full-year residents, part-year residents, nonresidents with Oregon tax liability, and certain composite return filers can qualify.

Taxpayers who fail to file for either year will not receive the kicker credit. It is crucial to file both returns to claim the refund.

How Is the Refund Calculated?

The kicker is calculated as a percentage of your Oregon personal income tax liability from 2024. For 2025 tax returns filed in 2026, the certified kicker rate is 9.863 percent of your 2024 tax liability before credits.

Example Calculation

If your total Oregon tax liability for 2024 was:

• $2,500, your kicker credit would be $246.58
• $5,000, your kicker credit would be $493.15
• $10,000, your kicker credit would be $986.30

(The calculation is Tax Liability × 0.09863.)

The kicker either increases your total refund or reduces the amount of tax you owe on your 2025 return.

Kicker Refund Timeline and Filing

Here’s what Oregon taxpayers should know about timing and claiming the kicker refund:

• The kicker credit will be claimed on the 2025 Oregon tax return filed in 2026.
• Filing typically opens in January 2026, and many refunds can begin as early as mid-February 2026, particularly for e-filed returns.
• Taxpayers should file electronically to get refunds fastest, as paper returns may be delayed in processing.
• Taxpayers can use Oregon’s “What’s My Kicker?” online tool to estimate their refund prior to filing.

What Happens If You Owe State Debts?

If a taxpayer has outstanding state obligations—such as back taxes, child support, court fines, or school loans—the refund may be applied to satisfy these debts before any remaining amount is issued. Taxpayers are notified if this occurs.

Additional Options for Your Refund

Oregon allows taxpayers to donate their kicker refund:

• You can donate your entire kicker amount to the Oregon State School Fund for public K-12 education.
• You can use Form OR-DONATE to direct donations to any approved charities.
• Once donated, the kicker amount cannot be reclaimed.

Important Table: Key Kicker Refund Information

Detail	Information
Total Refund Amount	$1.41 billion
Eligibility Years	Filed 2024 and file 2025 Oregon tax returns
Refund Type	Credit on 2025 Oregon tax return (claimed in 2026)
Calculation Rate	9.863% of 2024 tax liability
Eligibility Requirement	Must have Oregon tax liability in 2024
Refund Method	Reduces tax owed or increases refund
Start of Refund Issuance	As early as February 2026 for e-filed returns
Donation Options	School fund or approved charities
Debt Offset Possible?	Yes, for state debts

Strategic Tips for Taxpayers

To ensure you receive your kicker refund:

• Ensure you have filed the 2024 Oregon personal income tax return if you had a tax liability.
• Plan to file the 2025 Oregon tax return on time in 2026.
• Use electronic filing (e-file) for faster processing and potential early refund delivery.
• Check refund status using Oregon Department of Revenue online tools.

Conclusion

The confirmed $1.4 billion Oregon kicker tax refund presents a significant financial benefit for eligible taxpayers when they file their 2025 state income tax returns in 2026. Oregon’s constitutional kicker law ensures that excess tax revenue collected by the state is returned to those who paid it. By understanding eligibility, the calculation method, filing timeline, and strategic filing tips, residents can maximize their refund and avoid missing out on their share. With the refund calculated as roughly 9.863 percent of the 2024 tax liability and available through state tax credits, taxpayers have a clear pathway to benefit from this biennial tax mechanism.

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