Set up Oregon Transit Tax

This topic discusses how to set up Oregon Transit Tax (OTT) .

If you are an Oregon employer, you must withhold Oregon Transit Tax from your employees' wages as follows:
  • If the employee resides in Oregon, the withholding applies to all wages, regardless of where the employee works.

  • If the employee does not reside in Oregon, the withholding only applies to wages earned for services performed in Oregon.

If you are a non-Oregon employer, and you have employees that reside in Oregon, you have the option to withhold Oregon Transit Tax from their earnings, as long as their compensation falls within the definition of wages as stated in ORS 316.162. If you choose to not withhold the Oregon Transit Tax from their earnings, the employee is responsible for filing and paying the tax.

Note: Oregon Transit Tax amounts withheld during the year are reported in Box 14 of employee W-2s. If you are using Aatrix to generate W-2's, Oregon Transit Tax is reported as a local tax and will be included in Boxes 18, 19, and 20 of the W-2. Since Box 14 does not show subject amounts, if you want W-2s to reflect the subject amount, use Aatrix to generate W-2s.

The following information details how to set up the Oregon Transit Tax.

  1. From the main menu, select Payroll > Programs > PR Deductions/Liabilities.
  2. Set up a new deduction code for Oregon Transit Tax using the following settings:
    • Type = Deduction
    • Calculation Category = S-State
    • Method = G-Rate of Gross
    • Rate / Amount #1 = Enter the current rate (see the Oregon Department of Revenue for information.
    • Rate / Amount #2 = Enter the same rate you entered in the Rate / Amount #1 field.
    • Accumulate Subject Amounts = Select this check box.
    • Aatrix Tax Type (Addl Info tab, W2 section) = 5666 (Statewide Transit Tax)
    Important: The Aatrix Tax Type is required even if you are not using Aatrix. The system will use this information in the generation of W2s, as well as for the regulatory reports for Oregon Transit Tax available in PR Aatrix Report Selection (OR OR-STT- -1/2 Form and OR OR-STT-V Form).
  3. Save the record.
  4. From the main menu, select Payroll > Programs > PR State Information.
  5. In the State field, enter OR or press F4 to select Oregon from the list of states.
  6. Click on the Add'l State Based Dedn/Liabs tab.
  7. In the grid, add the deduction code that you just created in PR Deductions/Liabilities.
  8. Select the Always calc for resident check box.
  9. Save the record.
You are now set up to include Oregon Transit Tax when processing applicable employees.

When you are ready to process W-2s, you must add the Oregon Transit Tax deduction to the state-specific Box 14 information so that it is included when processing W-2s. For more information, see Setting State-Specific/Misc Box 14 Information for W-2 Processing.