HR Fast Facts: Portland Multnomah County Preschool for All Tax
Portland Multnomah County approved a measure to establish a tuition-free preschool program, Multnomah County Preschool for All (PFA).
Portland Multnomah County approved a measure to establish a tuition-free preschool program, Multnomah County Preschool for All (PFA).
The PFA program will be funded by personal income tax via employee payroll deductions which went into effect voluntarily on January 1, 2021, and mandatory beginning January 1, 2022. Zenefits supports this tax per agency requirements effective January 1, 2022.
More detailed information can be found on the Multnomah County site here, or on the Oregon Department of Revenue agency site here.
Setup
This new tax will be added to the existing agency, Oregon Department of Revenue. There will be a new line item for the Portland Multnomah County Preschool for All Tax. By default, residents of Multnomah County will be subject to the tax calculation.
Calculation
The PFA program is funded by a personal income tax of 1.5% on taxable income for individual employees making over $125,000 annually, and $200,000 for joint filers, as well as an additional 1.5% on taxable income for individual employees making over $250,000 annually and $400,000 for joint filers. This tax is applicable to residents of Multnomah County. For non-residents of Multnomah County, income sourced within the county will be subject to this tax.
Employers must offer to have this tax withheld for their eligible employees, and are required to automatically withhold this tax for employees making more than $200,000 annually.
However, employees may choose to change their opt in/out status if they wish to pay this tax outside of payroll directly to the agency, or via their spouse’s payroll if applicable.
If employees choose to change their opt in status, they must do so directly via the opt in/out form provided by the state. Employers may not opt in or out on behalf of their employees directly or penalties may be incurred.
This tax will reconcile on employee personal Annual Withholding Reconciliation returns, which will outline any differences in withholding throughout the year.
