Oregon Estate Taxes
Effective November 26, 2003, the Oregon legislature has resolved the uncertainty surrounding its inheritance tax laws by adopting the federal inheritance tax changes included in the Taxpayer Relief Act of 1997 and the Internal Revenue Service Restructuring Act of 1998. However, Oregon did not adopt the federal inheritance tax changes in the Economic Growth and Tax Reconciliation Act of 2001. Instead, Oregon inheritance taxes are determined under the Internal Revenue Code in effect December 31, 2000.
The differences between the Oregon and federal inheritance tax laws are summarized in the table below.
| Under Oregon Law |
Under Current Federal Law |
| Year |
Filing Threshold |
Unified Credit |
Percent of State Credit Payable to Oregon |
Filing Threshold |
Unified Credit |
Percent of State Credit Allowed |
| 2003 |
$700,000 |
$229,800 |
100% |
$1,000,000 |
$345,800 |
50% |
| 2004 |
$850,000 |
$287,300 |
100% |
$1,500,000 |
$555,800 |
25% |
| 2005 |
$950,000 |
$326,300 |
100% |
$1,500,000 |
$555,800 |
0% |
| 2006 |
$1,000,000 |
$345,800 |
100% |
$2,000,000 |
$780,800 |
0% |
| 2007 |
$1,000,000 |
$345,800 |
100% |
$2,000,000 |
$780,800 |
0% |
Returns. An Oregon Inheritance Tax Return (Form IT-1) must be filed with the Oregon Department of Revenue (DOR) if the value of the gross estate exceeds the applicable annual filing threshold (see table above). Along with Form IT-1, you must attach a copy of the federal estate tax return (Form 706), even if you are not required to file a federal estate tax return.
Like its federal counterpart, the Oregon return is due no later than nine months after the date of death. A filing extension or an extension of time to pay estate tax may be obtained. Just remember, though, that these are separate issues requiring separate permission from the DOR.
Filing late may cost you five percent of the tax owed and an additional 20 percent if the return is filed more than three months after the original or extended due date. Late payments are subject to interest and a delinquency penalty of five percent of the tax.
There has been a lot of confusion regarding Oregon inheritance taxes in recent years. As a practical matter, the executor of the estate should maintain regular contact with the Oregon DOR to make sure state inheritance tax issues are being handled properly. To contact the DOR, e-mail them at estate.help.dor@state.or.us or call them at 503-378-4988 or 1-800-356-4222 (toll free within Oregon).
Generation-skipping transfer tax. Oregon does not impose this type of tax.
|
|
