HB 3120
Increases the percentage of federal earned income credit allowable as a credit against Oregon personal income tax.
Jurisdiction
Oregon
Session
2025 Regular Session
At the request of
(at the request of Hugh Ady, Statecraft)
Committee
Revenue
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Sign in to take actionPublic sentiment
Support
100%
Oppose
0%
- Introduced
- Passed House
- Passed Senate
- To Governor
- Became Law
Bill overview
This bill increases the amount of the federal earned income credit that Oregon taxpayers can claim against their state income tax. Specifically, it raises the percentage of the federal credit that can be used as a credit to 12 percent, with an additional percentage for taxpayers with dependents under the age of three. The changes apply to tax years beginning on or after January 1, 2026, and extend the availability of this credit.
Key provisions
- Increases the allowable percentage of the federal earned income credit to 12% for eligible residents.
- Provides an additional 6% credit for taxpayers with dependents under the age of three.
- Offers a 15% credit for taxpayers with dependents aged three to five, and an 18% credit for dependents under three.
- Applies to tax years beginning on or after January 1, 2026.
- Extends the sunset provision for the earned income tax credit.
- Allows eligible nonresident taxpayers to claim a prorated credit.
- Provides for rules regarding proof of eligibility and credit determination.
- Specifies that refunds for earned income credit do not accrue interest.
Who is affected
- Taxpayers
- Low-to-moderate income individuals
- Families with young children
- Oregon residents
Notable changes
- Increases the percentage of the federal earned income credit that can be used as a state tax credit.
Sponsors
Official sponsors from legislative records.
Primary sponsor
Cosponsors
Arguments in favor
Reasons to support this legislation.
Supporters of the expansion argue that increasing the EITC would significantly benefit low- and moderate-income families, providing a vital lifeline during economic uncertainty. They contend that rural communities, in particular, are disproportionately affected by limited access to resources and job opportunities, making this expansion crucial for addressing poverty and promoting economic mobility. By expanding the credit, proponents believe that more families can afford basic necessities, invest in education and healthcare, and break the cycle of poverty, ultimately contributing to a more equitable society.
Source: Testimony Summaries
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