Oregon Child Tax Credit: Who Qualifies and How to Claim

The Oregon Child Tax Credit, also known as the Oregon Kids Credit, is a financial benefit for families with young children, applicable to the 2024 tax year filed in 2025. This state-level credit is designed to provide direct relief to low- and moderate-income households. It is a refundable credit, meaning families can receive the full amount as a refund even if it exceeds their total tax liability.

Eligibility Requirements for the Credit

To qualify for the Oregon Kids Credit, taxpayers must meet specific income and dependent criteria. The primary requirement is based on your modified Adjusted Gross Income (MAGI), which must be $30,750 or less for the 2024 tax year. This income threshold applies to all filing statuses, including single, married filing jointly, and head of household.

The next set of requirements pertains to the child. A qualifying child must have been five years old or younger on December 31, 2024. A family can claim the credit for up to five qualifying children. The child must also satisfy the federal definition of a “qualifying child” for the federal Child Tax Credit. This involves meeting relationship, residency, and support tests.

The relationship test requires the child to be your son, daughter, stepchild, foster child, sibling, or a descendant of any of these individuals. For the residency test, the child must have lived with you for more than half of the tax year. Finally, the support test mandates that the child could not have provided more than half of their own financial support during the year.

Calculating Your Credit Amount

The maximum Oregon Kids Credit is $1,000 per qualifying child. A family with a modified Adjusted Gross Income (MAGI) of $25,750 or less is eligible for the full $1,000 for each eligible child. The credit is calculated on a per-child basis, so a qualifying family with two eligible children could receive up to $2,000.

For taxpayers with a MAGI above $25,750, the credit amount begins to decrease. The credit is reduced as income rises, eventually phasing out completely for those with a MAGI of $30,750 or more. This phase-out is designed to target the benefit to lower-income families.

A significant feature of this credit is its refundability. A refundable credit means that if the amount of the credit is greater than the amount of income tax you owe, you will receive the difference as a direct payment. For example, if you owe $200 in state taxes but qualify for a $1,000 credit, you would not only eliminate your tax bill but also receive an $800 refund from the state.

How to Claim the Credit

To claim the Oregon Kids Credit, you must complete and file a specific form with your annual state tax return. The required document is the Oregon Kids Credit schedule. This schedule must be filled out accurately and attached to your primary Oregon personal income tax return, which could be Form OR-40, Form OR-40-N for nonresidents, or Form OR-40-P for part-year residents.

When completing the Oregon Kids Credit schedule, you will need to provide specific information for each qualifying child. This includes the child’s full name and their Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN). This information is used by the Oregon Department of Revenue to verify the child’s eligibility based on the age and dependency requirements.

The final step is to submit the entire tax packet, including your main return and the attached Oregon Kids Credit schedule. Taxpayers have the option to file electronically, which is the fastest and most common method, or to mail a paper copy of their return.