Personal Income Tax Withholding Information for Employers/Payroll Providers

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Information for employers and payroll providers about the payroll withholding requirements for Metro’s Supportive Housing Services (SHS) and Multnomah County’s Preschool for All (PFA) personal income taxes. The Revenue Division administers these taxes on behalf of Metro and Multnomah County.
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Overview: SHS and PFA Personal Income Tax

Metro Supportive Housing Services (SHS) Personal Income Tax

In 2020, voters in greater Portland approved a measure to raise money for supportive housing services for people experiencing homelessness or at risk of experiencing homelessness. The program is funded by two separate taxes: a personal income tax and a business income tax. These taxes went into effect for tax years beginning on or after January 1, 2021.

The personal income tax is 1% on taxable income above $125,000 for individuals and $200,000 for those filing jointly, and a 1% business income tax on net income for businesses with gross receipts above $5 million.

For more information visit Oregon Metro's SHS website.

Multnomah County Preschool for All (PFA) Personal Income Tax

In 2020, Multnomah County voters approved a measure to establish a tuition-free preschool program. This program is funded by a personal income tax, which went into effect for tax years beginning on or after January 1, 2021.

The personal income tax rate is 1.5% on taxable income over $125,000 for individuals and $200,000 for joint filers, and an additional 1.5% on taxable income over $250,000 for individuals and $400,000 for joint filers. The rate will increase by 0.8% in 2026.

For more information, visit Multnomah County's PFA website.


Payroll Withholding Requirements

Metro SHS Personal Income Tax

For calendar year 2021, payroll withholding is not required. However, an employer must offer in writing to withhold the Metro personal income tax from employees’ wages as soon as the employer’s payroll system(s) are able to process withholding. Metro understands the challenge of this transition and will not assess penalties if the withholding is not available in 2021.

Beginning January 2022, employers with a Metro location are required to withhold this tax from employees that work within Metro and earn $200,000 or more during the calendar year. Income above $200,000 will be withheld at a rate of 1%.

Employees may use the Metro OPT Form to elect in or out of withholding or to designate a different withholding amount, based on their tax situation.

For more information, including the complete tax codes and opt-in/opt-out forms, and written notification templates, visit Oregon Metro's SHS website.

Multnomah County PFA Personal Income Tax

For calendar year 2021, payroll withholding is not required. However, an employer must offer in writing to withhold the Multnomah County PFA personal income tax from employees’ wages as soon as the employer’s payroll system(s) are able to process withholding. Multnomah County understands the challenge of this transition and will not assess penalties if the withholding is not available in 2021.

Beginning January 2022, employers with a Multnomah County location are required to withhold this tax from employees that work within Multnomah County and earn $200,000 or more during the calendar year. Income above $200,000 will be withheld at a rate of 1.5%. Income above $400,000 will be withheld at a rate of 3%. View Multnomah County's PFA withholding calculator

Employees may use the Multnomah County Opt In/Out form to elect in or out of withholding or to designate a different withholding amount, based on their tax situation.

For more information, including the complete tax codes, opt-in/opt-out forms, and written notification templates, visit Multnomah County's PFA website.


W-2 Submissions

All employers who withhold the Metro Supportive Housing Services (SHS) and/or Multnomah County Preschool For All (PFA) tax for employees and who have employees with $200,000 or more of Metro and/or Multnomah County wages must electronically submit employee W-2 information to the Revenue Division. The due date for the W-2 submission is January 31 of the subsequent year. There is no extension of time to submit W-2s.

W-2s are submitted separately from the Annual Withholding Reconciliation returns and must be submitted electronically through Portland Revenue Online (PRO) in EFW2 format. Corrected W-2s must be submitted in EFWC2 format. If an employer cannot file electronically, they may request permission to use an alternate filing method by contacting the Revenue Division.

Failure to File Penalty

Failure to submit the W-2s by the due date will result in a $50 penalty for each W-2 not submitted, with a maximum penalty of $2,500 per jurisdiction. 


Withholding Return Filing Requirements

Employers must file quarterly withholding returns and annual withholding reconciliation returns for the Metro Supporting Housing Services (SHS) and Multnomah County Preschool For All (PFA) withholding tax programs with the City of Portland's Revenue Division. There is no extension to file quarterly withholding returns or annual withholding reconciliation returns.

Reporting due dates are the same as those for Oregon employer reports:

Filing Due Dates for Quarterly Returns
QuarterQuarter Ending DateReturn Due Date 
1st (January through March)March 31April 30
2nd (April through June)June 30July 31
3rd (July through September)September 30October 31
4th (October through December)December 31January 31, subsequent year 
Filing Due Dates for Annual Returns
YearYear Ending DateReturn Due Date
January through DecemberDecember 31January 31, subsequent year 

Bulk Upload File Information

Employers who are filing quarterly withholding returns and annual withholding reconciliation returns may file returns in bulk via manual or XML upload at Portland Revenue Online (PRO).

The quarterly withholding return XML template can be found on PRO under 'View More Business Services' in the Business and Payroll Taxes panel.

To request the Annual Withholding Reconciliation XML file template, please email EmployerWithholding@portlandoregon.gov.

Failure to File Penalty

Metro and/or Multnomah County employers who fail to file a timely Annual Withholding Reconciliation returns will be charged a $100 penalty per jurisdiction.


Remitting Withholding Payments

Employers must submit SHS and PFA personal income tax withholding payments to the Revenue Division. Payment due dates are the same as the dates for depositing federal and State of Oregon withholding tax liabilities. For more details, please see Oregon Metro's SHS website and Multnomah County's PFA website.

Contact

Employer Withholding Tax Help

Revenue Division

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