Oregon taxpayers are in for good news: the state’s unique “Kicker” tax credit is back for 2026, returning a massive $1.4 billion in surplus revenue to eligible residents.
Oregon’s $1.4 Billion “Kicker” Is Back: Here’s How Much You’ll Get
If you filed an Oregon state income tax return for tax year 2025, you may be entitled to a refund credit on your 2025 state return (filed in early 2026) that will either reduce your tax bill or increase your refund significantly.
What Is the Oregon Kicker? How Does It Work?
Oregon has a unique constitutional requirement that no state has: when state revenue exceeds forecasts by more than 2%, the surplus must be returned to taxpayers.
This unusual rule creates the “Kicker” — an automatic tax refund that appears on your state tax return as a refundable credit.
Calculate Your 2026 COLA Increase →2026 is a Kicker year because:
- Oregon’s tax revenues significantly exceeded the state’s budget forecast
- The surplus triggered the kicker mechanism
- Approximately $1.4 billion will be distributed to Oregon taxpayers
How Does the Kicker Calculate Your Refund?
The kicker is not a flat payment to every taxpayer. Instead, it’s calculated as a percentage of your 2024 Oregon tax liability.
Formula: Kicker Amount = (Refundable Credit Percentage) × Your 2024 Oregon Tax Liability
Example:
- If you paid $1,000 in Oregon state income tax in 2024
- And the kicker credit is 7% of tax liability
- Your 2026 kicker credit = $70
Taxpayers with higher tax liability will receive larger kicker credits.
Who Gets the Kicker? Eligibility Requirements
You’re eligible for the 2026 Oregon Kicker if:
- You filed a 2024 Oregon state income tax return on time (by April 15, 2025)
- OR you requested an extension and filed by the extended deadline
- You were a resident of Oregon during the 2024 tax year
- You had Oregon income in 2024
Non-filers: If you didn’t file a 2024 return because you weren’t required to, you may still qualify if you had Oregon income.
2026 Kicker Refund Amount: What Can You Expect?
The exact percentage has not been finalized as of July 2026, but historical kicker credits typically range from 2% to 10% of tax liability.
For 2026, preliminary estimates suggest a kicker credit of approximately 5-7% of 2024 tax liability.
Example Refund Amounts:
- If you paid $500 in Oregon taxes → expect $25-$35 kicker credit
- If you paid $1,000 in Oregon taxes → expect $50-$70 kicker credit
- If you paid $2,000 in Oregon taxes → expect $100-$140 kicker credit
How to Claim the Oregon Kicker: Step-by-Step
The kicker is automatically applied when you file your 2025 Oregon tax return in early 2026. You don’t need to take special action to claim it.
Option 1: E-File (Fastest Way)
- File electronically using tax software or a tax professional
- The kicker credit is automatically calculated
- Direct deposit: Refund issued within 21 days
- Paper check: Refund issued within 4-6 weeks
Option 2: Paper Return (Slower Processing)
- Mail your return using Oregon Form OR-40
- Processing time: 6-8 weeks or longer
Tip: Oregon strongly recommends e-filing to get your kicker refund faster.
Kicker Timing and Payment Schedule: When Will You Get Your Money?
E-Filed Returns:
- Deadline to file: April 15, 2026
- Processing time: 1-3 weeks
- Refund issued: February-March 2026
- Payment method: Direct deposit or paper check
Paper-Filed Returns:
- Deadline to file: April 15, 2026
- Processing time: 6-8+ weeks
- Refund issued: April-June 2026
- Payment method: Paper check by mail
Best timing strategy: File early (January-February 2026) with e-filing and direct deposit to get your refund by mid-March.
Is the Kicker Taxable? Tax Treatment
Good news: The Oregon Kicker is NOT taxable income on your federal tax return.
Since the kicker is:
- A refund of overpaid taxes (federal tax purposes)
- Not additional income
- Classified as a tax credit (not income)
You should not report the kicker on your federal return.
Note: If you received a kicker payment in a prior year and deposited it into a savings account earning interest, that interest is taxable. Only the interest earned is reportable, not the kicker itself.
Frequently Asked Questions
Q: What if I didn’t file a 2024 Oregon return?
A: If you had Oregon income, you may still qualify. You can file a late 2024 return.
Q: I moved out of Oregon. Am I still eligible?
A: Generally yes, if you were a resident during 2024 and filed a 2024 return.
Q: Will the kicker appear automatically on my return?
A: Yes. It appears automatically when you file your 2025 return.
Q: What if I owe taxes instead of getting a refund?
A: Yes. If you owe taxes, the kicker credit is applied to reduce your tax bill.
Q: When will I know the exact kicker percentage?
A: Typically announced by the Oregon Department of Revenue in January 2026.
