Oregon would revise tax rules and offer credits for jobs and housing

Oregon taxpayers would add certain vehicle-loan interest, excluded small-business stock gains and some federal depreciation differences when calculating Oregon income. These rules apply to taxpayers covered by Oregon personal or corporate income tax provisions and to the listed federal tax items. The depreciation adjustment may later be subtracted in the tax year when the older federal rules would have allowed the deduction. The rules use the federal definitions and limits stated in the act. These provisions apply to tax years beginning on or after January 1, 2026.

Eligible Oregon residents would receive an earned income credit equal to 14 percent of their federal credit, or 17 percent when they have a child under age three. The credit covers eligible resident individuals and eligible nonresidents, with nonresident credits prorated under Oregon law. Claimants must otherwise qualify for the federal earned income credit, subject to the identification-number rule in the text. The credit is refundable after other credits and tax prepayments are applied. The Department of Revenue may require proof and adopt administrative rules. The credit applies to tax years beginning on or after January 1, 2026.

A taxpayer would receive a $1,000 Oregon tax credit for each qualifying net new job, up to 10 jobs per tax year. The credit applies to individuals and corporations that create Oregon jobs paying at least 150 percent of the applicable minimum wage. The Oregon Business Development Department must certify eligibility before the taxpayer claims the credit. The credit cannot exceed the taxpayer’s tax liability and unused amounts may be carried forward for up to three succeeding tax years. Total certified credits for all taxpayers may not exceed $12.5 million in a tax year, with proportional reductions if applications exceed the cap. This credit applies to tax years beginning on or after January 1, 2026, and before January 1, 2032.

A vested public retirement plan member would receive a pension based on 1.8 percent of final average salary for service in a hazardous position. Hazardous positions include Oregon State Hospital jobs involving direct patient contact and telecommunicator jobs, along with positions meeting the listed emergency-work or physical-risk tests. The formula applies at normal retirement age and remains subject to federal benefit limits. Service outside police, firefighting and hazardous positions uses the 1.5 percent formula described in the text. The provision applies when an eligible member retires under the pension program; the act’s general effective date is the 91st day after the 2026 regular session adjourns.