I. End of the year reporting:

A. Electronic W2 Reporting (iWire):

Effective with 2009 forms W2, businesses with 250 or more employees are required to report W-2 information electronically. Smaller businesses will be phased in over the next two years.  All payroll service providers are also required to submit W2 information electronically with 2009 forms.  [OAR 150-316.202(3)].  A “payroll service provider” is any person who prepares payroll tax returns on behalf of someone else and is paid to do so. Most software is already updated to accommodate Oregon W2 efile. Check with your software vendor to obtain their updates.

NOTE: The due date for reporting is extended to March 31 for electronic filing. 

You can find important information and answers to basic questions about iWire on the Department of Revenue’s website:

1. Frequently Asked Questions:  http://www.oregon.gov/DOR/PERTAX/docs/iWire_FAQ.pdf

2. Specification information for software vendors: http://www.oregon.gov/DOR/PERTAX/docs/iwire_specs.pdf

3. Programming issues: http://www.oregon.gov/DOR/PERTAX/docs/iWire_troubleshoot.pdf

If you have any questions, feel free to contact us at 503 945-8091, or e-mail us at iWire.DOR@state.or.us

B. Important note:

Do not include the WBF (Workers Benefit Fund) Assessment or the Transit Tax Assessments on form W2 under “Local Taxes”.  These have no bearing on personal income taxes and therefore do not need to be reported.  Transit Taxes are also an employer tax and are not deducted from an employee’s paycheck.   

Note: You are required to retain W2 information for at least six years. You are also required to make all reasonable efforts to mail this information to all employees. Be sure to document your efforts should you be unable to get the W2 information to an employee. This information may be requested by the IRS.

II. Form WR:

All Oregon employers, even those submitting W2 information electronically, are required to submit the form WR (Oregon Withholding Annual Reconciliation Report) at the end of the year to reconcile what was reported on form OQ with the total withholding figures reported on W2's/1099’s for state taxes. This form can be downloaded from our website @ http://www.oregon.gov/DOR/BUS/forms-payroll.shtml.

The WR is required to be filed by February 28, 2010.  However, if you are required to submit your W2 information electronically, you can also submit the WR by the extended due date of March 31^st.  

If you are reporting a substantial change on the form WR, or are asking for a large refund due to errors that have occurred throughout the year, it is very important to substantiate those changes.  Failure to do so will result in delaying the processing of any refund request.

“Substantiation” should include such information as:

               1.    A complete explanation of the change and why the refund request is being made, (line 7 form WR)
2.   W2C and/or W3 transmittals showing the correct information reported to the IRS for state withholding taxes.
3.   Company reconciliation reports (other than the W3 transmittal) verifying what had been reported to the IRS for Oregon withholding.
4.   Record of when the employee relocated if this was the reason for correcting withholding 
5.   W4 information showing correct number of allowances claimed if necessary
6.   Any other substantiation that verifies the changes being reported on the form WR

If you also plan to submit amended returns reflecting these changes, be sure to send these in with the form WR. Sending these separately can cause confusion or changes being duplicated, resulting in possible assessments later on. 

Please contact us at 503 945-8091 if you have any questions on how to complete this form. 

III. Additional Tax Updates:

1.   Withholding Tax Tables:
Effective March 1, 2010 the Department of Revenue will make available an updated version of the withholding tables. 

       The updated tax tables and formulas will be available @ http://www.oregon.gov/DOR/BUS/payroll_updates.shtml

2.   The new transit rates for 2010 are:         TriMet:  0.006818
                                                               Lane Transit:  0.0066

3.   Employment Tax rates for new employers:   New Employer rate:  3.1% 
                                                                      Wage Base:  $32,100.00

4.   2009 Workers’ Benefit Fund Assessment (“Cents-Per-Hour”) Rate:   2.8 cents (unchanged from 2009)

The Payrolltax-News e-mail list provides employers with complete and up-to-date payroll tax information. Employers can self-subscribe here. Representatives in the Business Division will send information to employers through this list. Employers can request additional information by e-mailing payroll.help.dor@state.or.us.
 
As a standard practice, e-mail sent from the department will be in text form only. Department of Revenue will not open attachments.
 
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Cathy Tavares
Oregon Dept of Revenue
Cathleen.M.Tavares@state.or.us
503-945-8762