Tax Relief

The Oregon Income Division outlines the steps to take to eliminate unemployment advantages tax breaks

There is no need to submit a modified return as the status makes adjustments

SALEM, Ore. (KTVZ) – The Oregon Department of Treasury announced Friday that it will adjust tax returns for taxpayers who have already filed their 2020 tax returns and receive reasonable exemption from income taxes paid on recently exempted unemployment benefits in 2020.

“These taxpayers have already done what they should be doing. They filed their tax returns on time, ”said Revenue Director Betsy Imholt. “We will be correcting these returns to ensure these taxpayers are getting the correct refund under the new federal law.”

Oregon taxpayers who became unemployed in 2020 and have not yet filed their tax returns can do so now, according to instructions from the IRS.

“It is rare for the department to ask taxpayers to wait to file their tax returns. In this case, it was necessary to give the IRS time to provide guidance and to give e-file software vendors time to update their software as soon as Congress changed the law, “said Imholt.

The US bailout plan, which went into effect on March 11, exempts up to $ 10,200 per person in unemployment benefit from taxes through 2020 for households with a modified adjusted gross income of less than $ 150,000.

The change affects thousands of Oregon taxpayers who already filed their income tax returns and paid 2020 unemployment benefit taxes before Congress made the change in tax law.

Friday’s announcement means these taxpayers will not need to take any action to amend their tax returns. The department will correct this for them and in most cases affected taxpayers will receive refunds or have a lower tax burden.

The department is still working on the details for processing the fixes but expects to start adjusting returns next week. More information will be available in the coming days via the Department’s American Rescue Plan FAQ.

Most e-file software vendors have told DOR that they will have the required software updates by Friday. Taxpayers who have not yet submitted any documents should check with their tax advisor or software provider. More information on electronic filing can be found on the Agency’s website.

The deadline for filing and paying income tax returns for 2020 has been extended to May 17 by both the IRS and the DOR.

To receive tax forms, check the status of your refund, or make tax payments, visit or email You can also call 800-356-4222 toll-free from an Oregon prefix (English or Spanish) or 503-378-4988 in Salem and outside of Oregon. For TTY (hearing or speech impaired) we accept all relay calls.

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