Oregon recently released a new state-specific withholding allowance form for employees to use starting in 2019. Previously, Oregon employers were instructed to withhold Oregon taxes based on the withholding elections on employees' federal Form W-4. Employees could opt to file a separate Form W-4 for Oregon tax purposes, but it was not required. The Oregon Department of Revenue (ODR) has determined using federal Form W-4 may no longer result in sufficient Oregon tax withholding, due to changes in federal tax laws caused by the Tax Cuts and Jobs Act passed last year.
Starting January 1, 2019, the following employees need to complete the new Oregon Form OR-W-4
All new hires
Current employees who provided their employer with a 2018 or 2019 federal Form W-4 but not a separate form for Oregon withholding
Employees dissatisfied with their prior year Oregon tax payment or refund
Employees with a recent personal or financial change that could impact their taxes, such as change of income, filing status, or number of dependents
Oregon has also released a withholding calculator to assist taxpayers in determining their annual tax liability and whether their current withholding allowance elections will result in enough taxes withheld. The calculator also provides guidance on how to complete the new Oregon Form OR-W-4 to ensure enough taxes are withheld from the taxpayer's paychecks.