Earned income; use of individual taxpayer identification number in alternative; rules.

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(b) Notwithstanding paragraph (a) of this subsection, for a taxpayer with a dependent under the age of three at the close of the tax year, the credit allowed under this section shall be in an amount equal to 12 percent of the earned income credit allowable to the individual for the same tax year under section 32 of the Internal Revenue Code.

(2) A resident individual may claim a credit under this section, using either a Social Security number or an individual taxpayer identification number, if, but for section 32(m) of the Internal Revenue Code, the individual would otherwise be eligible to claim a credit under section 32 of the Internal Revenue Code. The credit allowed as provided in this subsection shall equal the percentage, as stated in subsection (1) of this section, of the amount that would be allowed on a federal return, based on the amount of the individual’s earned income and the other provisions of section 32 of the Internal Revenue Code.

(3) An eligible nonresident individual shall be allowed the credit computed in the same manner and subject to the same limitations as the credit allowed a resident by subsection (1) or (2) of this section. However, the credit shall be prorated using the proportion provided in ORS 316.117.

(4) If a change in the taxable year of a taxpayer occurs as described in ORS 314.085, or if the Department of Revenue terminates the taxpayer’s taxable year under ORS 314.440, the credit allowed by this section shall be prorated or computed in a manner consistent with ORS 314.085.

(5) If a change in the status of a taxpayer from resident to nonresident or from nonresident to resident occurs, the credit allowed by this section shall be determined in a manner consistent with ORS 316.117.

(6) If the amount allowable as a credit under this section, when added to the sum of the amounts allowable as payment of tax under ORS 316.187 or 316.583, other tax prepayment amounts and other refundable credit amounts, exceeds the taxes imposed by ORS chapters 314 and 316 for the tax year after application of any nonrefundable credits allowable for purposes of ORS chapter 316 for the tax year, the amount of the excess shall be refunded to the taxpayer as provided in ORS 316.502.

(7) The Department of Revenue may adopt rules for purposes of this section, including but not limited to rules relating to proof of eligibility, the furnishing of information regarding the federal earned income credit claimed by the taxpayer for the tax year and policies and guidelines for the determination of the amount of credit allowed under subsection (2) of this section.

(8) Refunds attributable to the earned income credit allowed under this section do not bear interest. [1997 c.692 §3; 2001 c.114 §33; 2001 c.660 §56; 2003 c.77 §12; 2005 c.832 §§54,57,59; 2007 c.880 §2; 2013 s.s. c.5 §6d; 2016 c.98 §1; 2019 c.579 §31; 2021 c.525 §49]

Note: Section 6, chapter 880, Oregon Laws 2007, provides:

Sec. 6. ORS 315.266 applies to tax years beginning before January 1, 2026. [2007 c.880 §6; 2013 c.750 §1; 2019 c.579 §32]

Note: Section 32a, chapter 579, Oregon Laws 2019, provides:

Sec. 32a. The amendments to ORS 315.266 by section 31 of this 2019 Act apply to tax years beginning on or after January 1, 2020, and before January 1, 2026. [2019 c.579 §32a]


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