"My God, Oregon has taxed my stimulus!"

When you take the genius of a Ron Wyden and blend it with the genius of a Tina Kotek, you can get some remarkable results. Take this story, for example. Apparently hundreds of thousands of Oregonians will be paying state income tax on their federal stimulus checks.

Say what???

The money is not "gross income" for federal tax purposes. But Congress phrased it as a tax credit, which means that technically it's less federal tax that you're paying. And you get to deduct the federal tax you owe when you figure out your taxable income on your Oregon tax return, at least up to a certain limit. And so if you're at or under that limit, the stimmy reduces your Oregon deduction and increases your Oregon tax.

(Did your eyes just glaze over reading that? That's what the polticians want. They want it so complicated that you can't understand it, or you can't be bothered to chase it all down.)

Anyway, putting aside all the gobbledy-gook, the bottom line is that for a lot of people, the stimulus is essentially taxable for Oregon state income tax purposes. (Unless I'm missing something, which is always a possibility, however remote, ha.)

Are you outraged? I am.

The worst part is that this problem was noted as early as last May. The state legislature could have fixed it. So could the United States Congress. But they haven't, as far as I can tell.

I suppose they still could fix it, but the tax forms are already published. Heck, some people have probably already completed theirs and mailed them in.

I'm convinced that for all their flaws, the people running things in the old days were a whole lot smarter than the group we have running things now. I give you Exhibit A: Oregon's taxing your stimulus.


  1. Wowza. Does that mean that businesses who received SBA EIDL grants or forgiveness on PPP loans face the same Oregon state tax issue?


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