The Oregon Kids Credit is a refundable tax credit available beginning with tax year 2025. The credit is designed to provide financial assistance to eligible Oregon families with young children. Because the credit is refundable, eligible taxpayers may receive the credit even if they owe no Oregon income tax.
1. Eligibility Requirements
To qualify for the Oregon Kids Credit, you must meet all of the following requirements:
- Use a filing status other than married filing separately. If you're married and filing separate returns, you do not qualify for this credit.
- Have one or more dependents age five or younger at the end of 2025 listed on your Oregon return.
- Have qualifying income under $31,550, including Oregon additions and subtractions and with excluded foreign earned income and total losses greater than $20,000 added back. Deducted tip income, overtime wages, and passenger vehicle interest paid must also be added back.
Use the Oregon Kids Credit worksheet to figure your credit.
For 2025, the maximum amount of the Oregon Kids Credit is $1,050 per qualifying dependent, for up to five dependents. Your credit amount may be limited by your income.
2. Credit Amount
For tax year 2025, the maximum credit is $1,050 for each qualifying child, up to a maximum of five qualifying children.
The amount of the credit depends on your Oregon modified adjusted gross income (MAGI).
- MAGI of $26,550 or less: Eligible for the full credit.
- MAGI over $26,550 but less than $31,550: The credit is gradually reduced.
- MAGI of $31,550 or more: No Oregon Kids Credit is allowed.
Use the Oregon Kids Credit worksheet or tax software to calculate the allowable credit if your MAGI is within the phaseout range.
3. Refundable Credit
The Oregon Kids Credit is fully refundable. If the credit is greater than your Oregon income tax liability, the remaining amount will be refunded to you.
4. How to Claim the Credit
Claim the Oregon Kids Credit when filing your Oregon individual income tax return.
Eligible taxpayers should complete any required Oregon schedules and worksheets included with the Oregon return or provided in approved tax preparation software. The Oregon Department of Revenue will determine the allowable credit based on the information reported on your return.
5. Important Notes
- A qualifying child must be under age 5 on the last day of the tax year.
- Only five qualifying children may be used to calculate the credit.
- The credit is subject to the Oregon modified adjusted gross income (MAGI) limitations.
- The Oregon Kids Credit is separate from the Oregon Earned Income Credit and the Working Family Household and Dependent Care Credit. Qualifying taxpayers may be eligible to claim more than one Oregon tax credit if they meet the requirements for each.
Source:
Publication OR-17
Form OR-40
Disclaimer: Always verify tax information with official Federal or State Department of Revenue Forms and Instructions. This response is based on limited retrieved context and may not reflect current or upcoming tax law changes.