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Taxation of Oregon PERS and Federal Pension Benefits
On December 31, 2003, the County received an outside
legal opinion that the County is prohibited by the Oregon PERS statutes
from taxing retirement benefits under the PERS system. Furthermore,
if the County may not tax Oregon PERS benefits, under federal law
it is prohibited from taxing federal pension benefits.
Accordingly, we have modified the Form MC TR
to allow PERS and federal pension benefits to be exempted on line
2. This exemption will be in addition to the $2,500 and $5,000 exemptions
for single or married filers.
If you are exempting your federal pension benefits,
you may only exempt those benefits taxed
by Oregon. The correct entry for federal pension benefits would be
the sum of your 1099-R less any amount
already exempted from line 16b of your federal 1040 or exempted on
line 17 of your Oregon Form 40 (or line 38 if filing Form 40P or Form
40N). Please attach a copy of your PERS or federal
pension Form 1099-R. Failure to attach your Form 1099-R for PERS or
federal pension benefits may result in denial of income exemption
for such benefits.
- Note: Federal pension
benefits include amounts paid from the Federal Retirement System
(FERS), the Civil Service Retirement System (CSRS), and military
retirement.
- Note: Only Oregon
PERS payments are exempt from the Multnomah County income tax. Other
public retirement programs that are not paid from the state of Oregon
Public Employees Retirement fund are not exempt.
If you assumed that your PERS or federal pension
benefits were taxable and you made a prepayment of the Multnomah County
income tax, we will refund the tax that you paid on your PERS/FERS
benefits after you file your County income tax return. The refunds
will be mailed after April 15.
Call the telephone helpline at (503) 988-ITAX if
you have individual questions. |
