There are two new local income taxes beginning in 2021. They affect individuals who live or work in the Metro District (greater Portland area) and Multnomah County. The Metro District tax also has business tax for entities with more than $5 million in gross receipts.
1. Metro Income Tax for Supportive Housing Services:
The program is funded by two separate taxes: a 1% personal income tax on taxable income above $125,000 for individuals and $200,000 for those filing jointly, and a 1% business income tax on net income for businesses with gross receipts above $5 million. The tax applies to anyone living or working in the Metro District.
For more information, please visit:
https://www.oregonmetro.gov/public-projects/supportive-housing-services/taxes-and-funding
From the FAQ: How do I know if I’m within Metro’s jurisdiction? To determine whether your residence, workplace and/or earned business income is within Metro’s jurisdiction, enter the property address into the Find your councilor tool. If the results provide you with a Metro Councilor, then the property is within Metro’s jurisdiction and may be subject to the personal or business income tax.
2. Multnomah County Preschool For All Personal Income Tax: The Preschool For All (PFA) program is funded by a personal income tax of 1.5% on taxable income over $125,000 for individuals and $200,000 for joint filers, and an additional 1.5% on taxable income over $250,000 for individuals and $400,000 for joint filers. The rate will increase by 0.8% in 2026. Residents of Multnomah County will have 100% of their Oregon Taxable Income subject to the tax thresholds. For non-residents of Multnomah County, income sourced within the County will be subject to the tax thresholds. Please refer to the FAQ for further clarification.
Multnomah County employers are required to withhold on behalf of employees for the Preschool For All Personal Income Tax. Employers are required to offer in writing to withhold for employees as soon as their payroll system is capable in 2021. Withholding is mandatory in 2022. Employers should automatically withhold for employees making over $200,000 per year. Employees may elect to opt in or out of withholding based on their individual tax situation.
For more information, please visit:
https://www.multco.us/finance/preschool-all-personal-income-tax
If you have questions about the applicability of these taxes to your situation, please schedule an appointment to meet with your CPA.
