Oregon taxpayers are due a record $5.61B kicker refund in 2024, the largest amount ever returned under the state’s unusual kicker law. Oregon’s “kicker” law was introduced in 1979 in order to rein in state spending; when revenues from personal income taxes and other non-corporate sources exceed the forecasted amount in a two-year budget period by at least 2%, the excess is returned to taxpayers in the form of a credit on taxes paid in the previous year. The kicker has been triggered 13 times since then (with the last time being last year, when taxpayers were returned $1.9B, the previous record). The rebate occurs in even-numbered years when Oregonians file taxes for the previous odd-numbered year.

When Oregon taxpayers file their 2023 returns in the spring of 2024, they will be credited with their kicker (provided they filed a return in 2022), based on their adjusted gross income. Kicker amounts range from $60 for the lowest income group to over $40,000 for high earners; the average kicker size will be $2,100, and the median $980. The kicker will amount to about 45% of the state personal income taxes paid last year returned to taxpayers. You can view a table with the estimated kicker size for different AGIs here.

Why such a large kicker this year? Forecasters underestimated Oregon’s resiliency after the pandemic; the state’s economy and tax revenues bounced back more quickly than anticipated. The estimates used to build the 2021-23 state budget were significantly off base.

There have been proposals to re-direct the kicker to other state projects rather than returning it to taxpayers — such as to K-12 education or a new Oregon Wildfire Mitigation and Adaptation Fund — but so far, they have failed to garner sufficient support in the Oregon legislature. To change or suspend the kicker would require a two-thirds majority vote of the Senate and the House, so it’s a high bar to meet. The corporate kicker, on the other hand, will go to K-12 public education rather than back to corporations.

Here are some resources to learn more about the Oregon kicker:

https://www.oregonlive.com/business/2023/08/oregon-taxpayers-set-to-receive-record-56-billion-kicker-heres-what-you-can-expect.html

https://www.opb.org/article/2023/08/30/oregon-tax-refund-state-economy-revenue/

https://www.statesmanjournal.com/story/news/politics/2023/05/17/what-to-know-about-oregon-tax-rebate-kicker-governor-legislature-check-payment/70229353007/