PORTLAND, Ore. (KOIN) — With tax season upon us once again, some are wondering how the child tax credits are impacting their tax returns.
Last year, KOIN 6 News learned some people would end up paying more in taxes due to stimulus checks. Now we’re hearing the same is true of the child tax credits for some taxpayers.
Those payments can affect the calculation of your federal tax liability subtraction, which means like the stimulus payments, the child tax credits can increase the amount of Oregon income some people are paying taxes on. As seen in the above video, a slide from a legislative revenue PowerPoint presentation shows when your federal taxable subtraction goes down, your Oregon taxable income goes up.
While these payments are not directly taxable by the state — they are indirectly taxable for some because of how Oregon’s tax laws are set up.
“That will change the federal tax liability, that subtraction — that is correct, but it depends on what your end up result might be, [which] will depend on the rest of your tax situation, how much income you made, you know, the number of children you have and so forth,” Oregon Department of Revenue Public Information Officer Rich Hoover said.
The Oregon Department of Revenue says this doesn’t impact taxpayers whose income is low enough that they don’t have a federal tax liability or higher-income taxpayers, but it does impact taxpayers in the middle.
When asked if they know how many Oregonians will end up paying more in taxes because of this, the ODR didn’t have an estimate at this time.
As with the stimulus checks, it would take an act from the legislature to make these child tax credits truly tax-free. A bill has introduced for that purpose, but keep in mind a bill aiming to change the same issue for stimulus checks has already been introduced — and has already failed.