The Oregon Department of Revenue (DOR) has released guidance for out-of-state and nonresident employers.
The Details:
Nonresident employers of Oregon resident employees:
Under Oregon law, employers must withhold tax from all wages paid to Oregon resident employees working in Oregon, regardless of whether they work out of the employer’s physical location in Oregon or work/telecommute from their residence.
Exceptions:
However, if an employer pays $300 or less within a calendar year to an Oregon resident, employers may be relieved of the duty to withhold if the employer can show, to the DOR’s satisfaction, that the individual employee will receive no more than $300 in wages while working in the state during the calendar year.
Note: The guidance states that while the DOR can’t require withholding for Oregon resident employees when the services are performed for an employer who doesn’t have employees working in Oregon, the DOR requests that employers register and withhold tax on wages paid to Oregon residents as a convenience to the employee.
Nonresident employers of Oregon nonresident employee:
Nonresident employers must withhold Oregon income tax from all wages earned by nonresident employees for services performed in Oregon, unless their Oregon earnings for the year will be less than the employee’s standard deduction amount based on filing status. Regardless if the employee earns more or less than the standard deduction, wages must still be reported as Oregon-source income on the federal Form W-2. Nonresident employees with wages greater than their standard deduction amount are required to file an Oregon nonresident return.
The Oregon standard deduction amounts for tax year 2022 are:
Single/married filing separately $2,420
Head of household $4,840
Married filing jointly $4,840
Qualifying widower $4,840
Next Steps:
Employers located outside the state of Oregon must withhold as noted in the Oregon DOR guidance.
Have Questions?
Please contact your dedicated service professional with any questions.