Here’s a reminder on the Oregon statewide transit tax

Oregon enacted a law in 2017 that included a new statewide transit tax (see Payroll Management Guide Report Letter 2520, September 5, 2017). On July 1, 2018, employers were required to start withholding the tax, one-tenth of 1% (.001) ($1 per $1,000) from: (1) wages of Oregon residents (regardless of where the work is performed) and (2) wages of nonresidents who perform services in Oregon. Employees who aren’t subject to regular state income tax withholding due to high exemptions, wages below the threshold for income tax withholding, or other factors are still subject to statewide transit tax withholding.

Form W-2. Currently, there is no requirement to report the statewide transit tax on the Form W-2. The Oregon Department of Revenue is analyzing the impact of adopting an administrative rule that requires statewide transit tax wages and withholding to be reported in Box 14 of Form W-2. This prospective rule change would be part of the fall 2018 rulemaking process. The draft rule would be posted on the website for review, and there would be an opportunity for public comment on the potential impacts of the requirement.
Form W-2 iWire. As with prior years, there will still be three separate Form W-2 filing options (manual entry, spreadsheet import, and bulk file).

  • Manual entry—There will be two new fields: “Statewide Transit Taxable Wages” and “Statewide Transit Tax Withheld.” These fields will be labeled as “Box 14″ in addition to the regular “Other” Box 14 where other information can be entered.
  • Spreadsheet import—The updated spreadsheet template option will have two new columns in the Form W-2 worksheet labeled “Box 14″: “Statewide Transit Wage” and “Statewide Transit Withholding.”
  • Bulk file—The updated bulk file specifications are available under “File Specifications” on the iWire information page.

Transit forms are available. The new forms are: Form OR-STT-1, Oregon Quarterly Statewide Transit Tax Withholding Return; Form OR-STT-2, Statewide Transit Tax Employee Detail Report; Form OR-STT-A, Oregon Annual Statewide Transit Tax Withholding Return; and Form OR-STT-V, Oregon Statewide Transit Tax Quarterly Payment Voucher and Instructions. (see Payroll Management Guide Report Letter 1515/2549, March 27, 2018). (Oregon Department of Revenue, Statewide Transit Tax, https://www.oregon.gov/DOR/programs/businesses/Pages/statewide-transit-tax.aspx; http://www.oregon.gov/DOR/programs/businesses/Pages/statewide-transit-tax.aspx; Oregon Department of Revenue, Income and Wage Information Return e-Services (i-Wire); Oregon Department of Revenue, Transit Tax Employee Stuffer.)

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