Portland-area high earners face confusion over new personal income taxes

The new taxes will impact people earning at least $125,000 or $200,000 as a couple.

PORTLAND, Ore. — As we look to tax season, those earning higher salaries in the Portland metro area are gearing up to pay two new personal income taxes. These are the Metro Supportive Housing Services Tax and the Multnomah County All-Inclusive Preschool Income Tax.

“I got a lot of phone calls this year saying, what are these new taxes and what am I supposed to do?” said Richard Sohler, general counsel for Sohler Whitman. “[The taxes] apply to different jurisdictions; one is Metro which includes Multnomah, parts of Clackamas and Washington counties, and the other is purely for Multnomah County.

Sohler points out that depending on where you live, you might only pay one or both of the taxes.

The other deciding factor is income. Both taxes only apply to those earning at least $125,000 per year as an individual or $200,000 if filing jointly. Taxes will be applied to income earned above these amounts. Tax rates start at 1.5% for the Supportive Housing Services Tax and 1% for the Head Start Tax for All.

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Voters approved both income taxes in 2020. In 2021, employers were not required to withhold income for these taxes, but they will be in 2022.

“So really, taxpayers inside Metro and/or Multnomah County need to take their time fetching because you might inadvertently miss that you owe that tax.”

Those who need to pay one or both of the new personal income taxes can do so through the City of Portland Revenue Division website. Once taxpayers get past any additional confusion that may create, they will find everything they need on the site, including tools that will calculate what they owe. The site offers options for downloading forms to pay by mail or online.

“So whether you live in Clackamas, Washington County, or anywhere else, this City of Portland website is the resource for anyone concerned with Metro Tax or Multnomah County Tax,” Sohler said.

Again, starting this month, employers will be required to withhold income for these taxes for employees to whom they apply. If employees want to opt out of these deductions, they can file a request to do so.

“The most important thing for employers is to speak to human resources or their payroll service provider to ensure they are aware of the change and that the information is passed on to the appropriate employees.”

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