Oregon would use 2025 federal tax rules in state laws

Oregon would use federal tax law through December 31, 2025, for covered state tax references. The covered references include personal and corporate income taxes, tax credits, and Oregon's tax on business sales. Specific Oregon exceptions would still apply. References defining taxable income would follow federal law applicable to the taxpayer's tax year.

Oregon savings, public retirement, and worker benefit programs would use the federal law dates named in the bill. These references cover education and disability savings, matched savings for lower-income households, public retirement, unemployment insurance, and paid family and medical leave. January 1, 2026, would be the federal reference date for public retirement employee definitions and minimum withdrawal rules. December 31, 2025, would apply to the other covered references.

Taxpayers would file amended returns within legal deadlines when the listed provisions require corrections to earlier tax years. The correction rules would cover tax years beginning before January 1, 2026, affected by the listed tax and savings provisions. Federal timing rules for tax law enacted before January 1, 2026, would apply to Oregon personal and corporate income taxes where they can be applied. Interest and penalties on extra tax caused by the listed provisions' retroactive treatment would be canceled. Refunds caused by that treatment would earn no interest. If taxpayers did not file required corrections, the Oregon Department of Revenue would make them by the normal review deadline or one year after a return for a tax year beginning in 2026 was filed, whichever is later. If enacted, the act would take effect on the 91st day after the 2026 regular session adjourns. The general application rule covers activities on or after January 1, 2026, in tax years beginning on or after that date.