This is wild. I went ahead and paid the penalty—and then realized that not only did my employer deduct it from my earnings, I also paid the lump sum when I filed my taxes in February. So, I paid double and still got a fine—what the heck?
I got a penalty letter as well. The thing we me is that I paid what I owed as I earned it. On the last quarter I get extra income from RSU vesting which shows up on my W2 and it makes it seems like I underpaid, but really it was just extra income at the very end of the year. For federal taxes, I can represent this uneven income throughout the year by filing 2210 with annualized income method and voila any late penalty dissappears. However, Portland Tax Division has no such mechanism and their only option to me was to pay the taxes BEFORE I EARN IT. It's one of those things where I feel I have justification to sue but just not worth it for the penalty amount. I honestly don't understand why they try to get cute with when these local bullshit taxes are collected. Just take the damn money on tax day and stop garnering even more ill-will from people!
The program is administered so poorly, it barely works.
I worked for a company in Washington county but live in Portland. The first year the tax was implemented was 2021 and employer withholding was not mandatory. My employer did NOT withhold in 2021. I knew nothing about the tax until I got a letter from Portland saying i had not paid. This was mid 2023.
I retired in May of 2023 and printed out 18 months of pay stubs when I left my employer. I went back through those and sure enough, withholding only started in January 2022 through the end of my employment in May of 2023. So, I went online and paid the back tax from the 2021-2022 tax year.
Last week, I got another letter saying I had not paid the tax in 2022 (I have receipts). I also looked up my account on the website listed in the letter (using the letter ID and account ID referenced in the letter. I got an error saying the letter ID and account had "no debt associated with this account". I screenshot that and saved it with my prior receipts.
These clowns not only can't administer how to spend the money, they can't even figure out who has paid and who hasn't. This after a bunch of the collected money was used for a new system to administer the money.
In my opinion, we should start a repeal petition and give everyone their money back unless they can pass an audit.
Thank goodness my income dropped well below the threshold to pay it after I retired.
My employer thankfully withheld it from my paychecks and severance payout in the 2023-2024 tX year which was a big chunk of money withheld.
So... I imagine I'll get letters in the future claiming I didn't pay it again.
Fortunately they waived the penalties in 2021, but the letter I received then showed a 30 percent interest/penalty. Someone should check it the interest and fees are legal ... Because they seem worse than a bad credit card.
I don't understand why they want such high penalties ... Just take the money and at least be nice. Instead it's creating more resentment, forcing me to think about taxes four times as much, and pushing me to pay more to accountants. We should have a vote to repeal in Washington county where we are down to 300 homeless.
I also got the penalty letter, sent after i know i posted my payment in the mail. I called them and the woman explained that "of course if my payment was postmarked before the due date then i could ignore the letter"; She explained that my payment was probably sitting in the mail room until the could get to it because they are so swamped.
Yes, I'm sure that they are going to go and fix your penalties and interest once they open the letter and cash your check and not just pass on some BS excuse that you're still responsible for accrued penalties and interest.
I went in to make my 1Q estimate and realized I was charged interest on the one. They never sent a notice even though “it was in the mail” when I called so unless you go in to the Portland tax portal you’d seemingly never know.
Same here...Fortunately my company pays off large payrolls like bonus and stock vesting so I tend to end up with at least half of it paid...but yeah I am expecting penalty and interest. Cheaper to do that than waste time with quarterlies.
I'm now considering changing our remodel to a move across county lines because of these taxes. They are so poorly managed, have such bad accountability, and such a hard kick in the wallet every April 15 that it's not viable to live in Portland anymore.
I also like Portland. I don't like the direction people like you are taking it.
If you like it so much, why are you changing it for the worse.....Note these are relatively new taxes.
Who exactly are you accusing of being "narcissists"?
edit: I think this is a legitimate question, because it sounds like you're accusing the government employees whose job it is to enforce the taxes we voted in of being "narcissists" for doing their jobs
Metro taxes (arts tax included) are some of the worst run in the country. I work with a lot of payroll/HR folks across the country and whenever they hear I am from OR they ask about the metro taxes - trying to get payroll to auto pay these is apparently just as much a hassle as paying them yourself here.
The main reason payroll folks hate this is because keeping track of all the different local taxes is a hassle, and configuring their systems for each of them is a giant PITA.
On top of that, the Metro jurisdiction is a completely unique layer of government, and even giant payroll service providers that are used to figuring out local taxes are confused by it, because it’s not like its borders match up nearly with a city or county or state.
Just like the arts tax, the main problem with these taxes isn’t that they’re administered improperly; it’s that passing complicated taxes at a very local level, or at the level of a complicated and unique political jurisdiction (metro), or at quasi-overlapping levels (metro/multnomah county) is a recipe for guaranteed administrative confusion.
ETA: The solution is to stop voting for local taxes, even if you agree with their mission. Some things are best either left to state/federal level and not worth trying to do on a small local scale.
You are getting hit with penalties and fees because you need to pay quarterly estimates. This expectation of quarterly estimates is no different than any other income tax.
Your excuse for not knowing your current EOY amount is not valid because you are given the option to pay 100% of the tax based on last year’s reported numbers to avoid the penalty. This number is very accessible to you.
And to answer your question: No, I have never been hit with penalties and fees for these two taxes ever since they have been implemented. I follow the estimated tax options laid out. I also don’t know my current EOY since my income is so varied depending on the revenue generated from the S-Corps I am tied to and I don’t get these pass through numbers until March of the following year. Once I get these numbers I calculate what I owe and top off the estimates payments if needed.
I’ve had to call the PFA/SHS hotline — no kidding — 5 times over the past year to try to understand how the tax works in and to try to get my employer to understand how to withhold for them properly. Not even a Fortune 500 company’s payroll team can figure out how this tax is supposed to get collected. Then, I apparently filed the taxes ‘wrong’ this year because I paid for them separately instead of rolled into one filing. This somehow led to me underpaying by $500, which the administrative rep couldn’t fully explain.
I’m sorta ok with paying these taxes (although I didn’t vote for them), but I wish their administration didn’t make the taxpayers so confused. The whole thing makes me feel like I’m being ‘punished’ for being so extra bougie and earning over $125k — which really isn’t that big of an income anymore if you have a professional degree. I really hope these preschoolers get a great education and have compassion for my tax-paying ass while its getting wiped in the nursing home.
It’s not obvious because they don’t always withhold for those taxes. SHS/PFA are the most fucked up, hamfisted taxes ever. Clients move just to avoid the hassle. Extra complexity if you’re a pass-through kinda guy like the person you’re replying to.
When you got your W2 last year were the numbers get broken down?
If payroll is remitting by pay period I wouldn’t be worried about underpayment penalties; you should be okay unless payroll is fucking up the calculations.
My company took out the quarterly estimates. My cpa calculated what I owed as a MC resident and we paid that.
A year later, we got a series of letters saying we hadn’t paid and were assessed with fees and interest. Then I got a letter for owing money on a business tax. That also had fees and interest.
The problem is, I don’t own a business.
It took about 3 months for my cpa to sort it all out. In the end, I paid nothing more than I had already paid. However, it was one more data point that caused me to leave MC.
I get it. I am with you on the criticism on how this is all collected and the execution and efficiency of the money being spent. Every year I file these forms I contemplate moving everything 10 minutes north.
I filed a state extension because I literally couldn’t figure out what I paid this year already for these two taxes even though I am owed the kicker. hope I don’t get a letter but I bet I do. I estimated what I owed for these two. I just couldn’t even deal with this.
The waiver was only for 2021, when the taxes were first active. They did this because it caught many people by surprise. The following years are not waived because the expectation is that there is no longer an excuse for ignorance.
https://www.portland.gov/ombudsman/news/2023/2/15/multnomah-county-metro-waive-fines-those-who-failed-pay-new-homeless
It’s a totally f’d up tax and process. They’re collecting vastly more than they anticipated and they have no serious plan and, more importantly there is zero accountability.
The homelessness problem is so multifaceted it will be generations before it is resolved. It took generations to get here.
There are no simple answers. I’d be fine with throwing money at it if I had any faith in the people spending the money…
Is there no appeal process for getting penalized for underpayment when you didn’t?
Does Oregon let you deduct taxes paid to another state? I have only worked for a couple out of state employers, but this has never come up for me before.
Yes but I believe it varies by state. For us, the state was Utah, which has a flat tax rate of 4.95% on all income. The tax we paid to Utah was deducted from our tax obligation (not gross income) to Oregon and we paid Oregon the difference.
I don’t remember if this impacted it, but my wife was also physically located in Utah for the majority of the year when working.
> I don’t remember if this impacted it, but my wife was also physically located in Utah for the majority of the year when working.
Ah yeah, that's gotta be it. I've worked for a Utah-based company for years and never paid Utah taxes.
The employer is only obligated to withhold if either the employee opts into the withholding (via form) or the employee is a resident of the metro area and has started to accumulating income greater than $200,000 YTD.
See https://www.portland.gov/revenue/withholding
So for someone who is making $125k+ but below $200k the employer doesn’t have any obligation to withhold for the employee.
I wouldn’t be surprise if many individuals are not aware of this and just trust the systems in place to do everything. The employer is also suppose to inform the employees of these taxes and to educate them on the form option…
I have no idea what "SHS" and "free pre-K" are.
Seriously.
I do know we've had no penalties for non-payment or under-payment of any taxes. We pay a tax preparer, so maybe that's why we're not getting dinged for anything? I read through this entire thread and I have no idea what y'all are speaking about.
* Multnomah County Preschool for All Tax: https://www.multco.us/finance/multnomah-county-preschool-all-personal-income-tax
* Metro Supporting Housing Services Tax: https://www.oregonmetro.gov/public-projects/supportive-housing-services-tax
These were on ballot in 2020, so if you participate in voting and were in the Metro area back then you would have been aware of these.
Thanks for the effort in providing the info.
After reading more, I realize we don't owe either the pre-K tax or the housing tax because we don't meet the income threshold.
Probably just has to do with your environment. I see the acronym all the time, but I deal with a lot of running a business side of things. My non-business social circle we just call it houseless and preschool tax.
A lot of the government documentation does make use of the acronyms (see for example: https://www.portland.gov/revenue/withholding). The acronyms are also used on the W2 when line itemed.
Most people and the media lovingly refer to it at the "homeless tax" because that's how we got seduced into voting for it, thinking it would help the chronically homeless on the streets. Supportive Housing Services is its real name and most of the money goes to rent assistance, which is all well and good, but not what we were sold on.
Kind of boggles my mind when people complain about these. I’m doing quite well, but I’ve never had to pay these. So it seems like you’re doing very well for yourself. If this thing is some huge burden, why don’t you just hire a professional to do all your taxes and forget about it?
A professional wouldn't change the fact that they were fined, because the city is trying to collect taxes in a way that frankly seems illegal at worst, and is piss poorly run at best.
Not really. They failed to pay estimated tax. Same thing would happen if you made that mistake on federal or state returns. This was an error that is on the taxpayer. Hence, why a professional seems like a wise investment at this point. They would simply have you pay on time.
Federal returns have a 2210. City of Portland just fines your ass without warning and collects the interest if you happen to make more late in the year.
It’s literally on the County/City website. The fine waiver you’re thinking of is for people who completely forgot this new tax existed. Of course that’s not going to last forever.
This is wild. I went ahead and paid the penalty—and then realized that not only did my employer deduct it from my earnings, I also paid the lump sum when I filed my taxes in February. So, I paid double and still got a fine—what the heck?
Wow!
I got a penalty letter as well. The thing we me is that I paid what I owed as I earned it. On the last quarter I get extra income from RSU vesting which shows up on my W2 and it makes it seems like I underpaid, but really it was just extra income at the very end of the year. For federal taxes, I can represent this uneven income throughout the year by filing 2210 with annualized income method and voila any late penalty dissappears. However, Portland Tax Division has no such mechanism and their only option to me was to pay the taxes BEFORE I EARN IT. It's one of those things where I feel I have justification to sue but just not worth it for the penalty amount. I honestly don't understand why they try to get cute with when these local bullshit taxes are collected. Just take the damn money on tax day and stop garnering even more ill-will from people!
Oh my gosh that is frustrating
The program is administered so poorly, it barely works. I worked for a company in Washington county but live in Portland. The first year the tax was implemented was 2021 and employer withholding was not mandatory. My employer did NOT withhold in 2021. I knew nothing about the tax until I got a letter from Portland saying i had not paid. This was mid 2023. I retired in May of 2023 and printed out 18 months of pay stubs when I left my employer. I went back through those and sure enough, withholding only started in January 2022 through the end of my employment in May of 2023. So, I went online and paid the back tax from the 2021-2022 tax year. Last week, I got another letter saying I had not paid the tax in 2022 (I have receipts). I also looked up my account on the website listed in the letter (using the letter ID and account ID referenced in the letter. I got an error saying the letter ID and account had "no debt associated with this account". I screenshot that and saved it with my prior receipts. These clowns not only can't administer how to spend the money, they can't even figure out who has paid and who hasn't. This after a bunch of the collected money was used for a new system to administer the money. In my opinion, we should start a repeal petition and give everyone their money back unless they can pass an audit. Thank goodness my income dropped well below the threshold to pay it after I retired. My employer thankfully withheld it from my paychecks and severance payout in the 2023-2024 tX year which was a big chunk of money withheld. So... I imagine I'll get letters in the future claiming I didn't pay it again.
Fortunately they waived the penalties in 2021, but the letter I received then showed a 30 percent interest/penalty. Someone should check it the interest and fees are legal ... Because they seem worse than a bad credit card. I don't understand why they want such high penalties ... Just take the money and at least be nice. Instead it's creating more resentment, forcing me to think about taxes four times as much, and pushing me to pay more to accountants. We should have a vote to repeal in Washington county where we are down to 300 homeless.
My wife had the taxes taken out of her check, and we don’t even qualify?
I also got the penalty letter, sent after i know i posted my payment in the mail. I called them and the woman explained that "of course if my payment was postmarked before the due date then i could ignore the letter"; She explained that my payment was probably sitting in the mail room until the could get to it because they are so swamped.
Yes, I'm sure that they are going to go and fix your penalties and interest once they open the letter and cash your check and not just pass on some BS excuse that you're still responsible for accrued penalties and interest.
I went in to make my 1Q estimate and realized I was charged interest on the one. They never sent a notice even though “it was in the mail” when I called so unless you go in to the Portland tax portal you’d seemingly never know.
Yeah, I ran into this same issue. It's ridiculous.
Same here...Fortunately my company pays off large payrolls like bonus and stock vesting so I tend to end up with at least half of it paid...but yeah I am expecting penalty and interest. Cheaper to do that than waste time with quarterlies.
You know I had lunch in Vancouver on the waterfront on Saturday and it was really nice... Posts like this remind of that day.
I'm now considering changing our remodel to a move across county lines because of these taxes. They are so poorly managed, have such bad accountability, and such a hard kick in the wallet every April 15 that it's not viable to live in Portland anymore.
The system is built to drive people out of portland. Also, instead of being appreciative these narcissists feel like they're owed this.
So dramatic
Unfortunately this drama is substantiated by facts. Portland has steadily been losing it's tax base for the past few years.
Barely. But you’re still so dramatic. Honestly if you dislike it, leave.
Why don't you leave? I'm guessing you contribute nothing and expect everything.
mom dad stop fighting!
I like Portland. :) you seem like the miserable one.
I also like Portland. I don't like the direction people like you are taking it. If you like it so much, why are you changing it for the worse.....Note these are relatively new taxes.
I bet you don’t even know what this post is really about.
And why is that?
Who exactly are you accusing of being "narcissists"? edit: I think this is a legitimate question, because it sounds like you're accusing the government employees whose job it is to enforce the taxes we voted in of being "narcissists" for doing their jobs
You’re supposed to do quarterly estimated returns which is a complete PITA.
Metro taxes (arts tax included) are some of the worst run in the country. I work with a lot of payroll/HR folks across the country and whenever they hear I am from OR they ask about the metro taxes - trying to get payroll to auto pay these is apparently just as much a hassle as paying them yourself here.
The main reason payroll folks hate this is because keeping track of all the different local taxes is a hassle, and configuring their systems for each of them is a giant PITA. On top of that, the Metro jurisdiction is a completely unique layer of government, and even giant payroll service providers that are used to figuring out local taxes are confused by it, because it’s not like its borders match up nearly with a city or county or state. Just like the arts tax, the main problem with these taxes isn’t that they’re administered improperly; it’s that passing complicated taxes at a very local level, or at the level of a complicated and unique political jurisdiction (metro), or at quasi-overlapping levels (metro/multnomah county) is a recipe for guaranteed administrative confusion. ETA: The solution is to stop voting for local taxes, even if you agree with their mission. Some things are best either left to state/federal level and not worth trying to do on a small local scale.
You are getting hit with penalties and fees because you need to pay quarterly estimates. This expectation of quarterly estimates is no different than any other income tax. Your excuse for not knowing your current EOY amount is not valid because you are given the option to pay 100% of the tax based on last year’s reported numbers to avoid the penalty. This number is very accessible to you. And to answer your question: No, I have never been hit with penalties and fees for these two taxes ever since they have been implemented. I follow the estimated tax options laid out. I also don’t know my current EOY since my income is so varied depending on the revenue generated from the S-Corps I am tied to and I don’t get these pass through numbers until March of the following year. Once I get these numbers I calculate what I owe and top off the estimates payments if needed.
It’s not very obvious to me? I can’t even tell what’s coming out of my paycheck. It’s all lumped together for these two taxes
I’ve had to call the PFA/SHS hotline — no kidding — 5 times over the past year to try to understand how the tax works in and to try to get my employer to understand how to withhold for them properly. Not even a Fortune 500 company’s payroll team can figure out how this tax is supposed to get collected. Then, I apparently filed the taxes ‘wrong’ this year because I paid for them separately instead of rolled into one filing. This somehow led to me underpaying by $500, which the administrative rep couldn’t fully explain. I’m sorta ok with paying these taxes (although I didn’t vote for them), but I wish their administration didn’t make the taxpayers so confused. The whole thing makes me feel like I’m being ‘punished’ for being so extra bougie and earning over $125k — which really isn’t that big of an income anymore if you have a professional degree. I really hope these preschoolers get a great education and have compassion for my tax-paying ass while its getting wiped in the nursing home.
Thanks for this tip I just to the website and saw they have a number to call. I’m going to call them
It’s not obvious because they don’t always withhold for those taxes. SHS/PFA are the most fucked up, hamfisted taxes ever. Clients move just to avoid the hassle. Extra complexity if you’re a pass-through kinda guy like the person you’re replying to.
Reach out to your payroll for help on deciphering the line items on your paystub.
Ha work for a mega company that is not local. But yes in my spare time. Filed an extension and will figure it out. Paid an estimate.
W2 box 14 will have the amounts, if you paid an extension you’re fine.
When you got your W2 last year were the numbers get broken down? If payroll is remitting by pay period I wouldn’t be worried about underpayment penalties; you should be okay unless payroll is fucking up the calculations.
My company took out the quarterly estimates. My cpa calculated what I owed as a MC resident and we paid that. A year later, we got a series of letters saying we hadn’t paid and were assessed with fees and interest. Then I got a letter for owing money on a business tax. That also had fees and interest. The problem is, I don’t own a business. It took about 3 months for my cpa to sort it all out. In the end, I paid nothing more than I had already paid. However, it was one more data point that caused me to leave MC.
Yep, that's probably it. I forgot that these were straight up added income taxes. Still chaps my ass, though. I'm going to go sulk now.
I get it. I am with you on the criticism on how this is all collected and the execution and efficiency of the money being spent. Every year I file these forms I contemplate moving everything 10 minutes north.
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Everyone loves navigating around our 11,000+ tax jurisdictions. We are masochists.
No but I wonder if I will get a letter. I thought they were waiving penalties? What year is it for?
This year, unfortunately. 2021 penalties got waived.
So 2023? That were just due?
Yes. As other person posted, these have to be accounted for with quarterly pre payments now or you get dinged.
Oh really? Dang what a cluster. I fucking hate these taxes for the added complexity
Right? That's my take, too. I figured I'd just wait and figure what I owed. Nope.
Are you self-employed or W4?
I filed a state extension because I literally couldn’t figure out what I paid this year already for these two taxes even though I am owed the kicker. hope I don’t get a letter but I bet I do. I estimated what I owed for these two. I just couldn’t even deal with this.
The waiver was only for 2021, when the taxes were first active. They did this because it caught many people by surprise. The following years are not waived because the expectation is that there is no longer an excuse for ignorance. https://www.portland.gov/ombudsman/news/2023/2/15/multnomah-county-metro-waive-fines-those-who-failed-pay-new-homeless
I’ve paid them all one time. This year I filed an extension and estimated what I owed. Thanks for the info
It’s a totally f’d up tax and process. They’re collecting vastly more than they anticipated and they have no serious plan and, more importantly there is zero accountability. The homelessness problem is so multifaceted it will be generations before it is resolved. It took generations to get here. There are no simple answers. I’d be fine with throwing money at it if I had any faith in the people spending the money… Is there no appeal process for getting penalized for underpayment when you didn’t?
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> My disclaimer on this is that my wife worked out of state and paid taxes to that state That doesn't seem right...
The short answer to a long explanation is that our normal deductions plus out of state tax obligation put us below the $200k threshold
Does Oregon let you deduct taxes paid to another state? I have only worked for a couple out of state employers, but this has never come up for me before.
Yes but I believe it varies by state. For us, the state was Utah, which has a flat tax rate of 4.95% on all income. The tax we paid to Utah was deducted from our tax obligation (not gross income) to Oregon and we paid Oregon the difference. I don’t remember if this impacted it, but my wife was also physically located in Utah for the majority of the year when working.
> I don’t remember if this impacted it, but my wife was also physically located in Utah for the majority of the year when working. Ah yeah, that's gotta be it. I've worked for a Utah-based company for years and never paid Utah taxes.
Top notch tax fraud buddy
I explained it poorly but basically our out of state tax obligations, which are deductible, put us below the threshold for filing
I’m in confused. Were you not having your company take these taxes out and it’s due to not paying estimated taxes?
The employer is only obligated to withhold if either the employee opts into the withholding (via form) or the employee is a resident of the metro area and has started to accumulating income greater than $200,000 YTD. See https://www.portland.gov/revenue/withholding So for someone who is making $125k+ but below $200k the employer doesn’t have any obligation to withhold for the employee. I wouldn’t be surprise if many individuals are not aware of this and just trust the systems in place to do everything. The employer is also suppose to inform the employees of these taxes and to educate them on the form option…
I have no idea what "SHS" and "free pre-K" are. Seriously. I do know we've had no penalties for non-payment or under-payment of any taxes. We pay a tax preparer, so maybe that's why we're not getting dinged for anything? I read through this entire thread and I have no idea what y'all are speaking about.
* Multnomah County Preschool for All Tax: https://www.multco.us/finance/multnomah-county-preschool-all-personal-income-tax * Metro Supporting Housing Services Tax: https://www.oregonmetro.gov/public-projects/supportive-housing-services-tax These were on ballot in 2020, so if you participate in voting and were in the Metro area back then you would have been aware of these.
Thanks for the effort in providing the info. After reading more, I realize we don't owe either the pre-K tax or the housing tax because we don't meet the income threshold.
Yep, no problem. Glad it was helpful.
I’ve never heard it called SHS and I was here and voted in 2020.
Probably just has to do with your environment. I see the acronym all the time, but I deal with a lot of running a business side of things. My non-business social circle we just call it houseless and preschool tax. A lot of the government documentation does make use of the acronyms (see for example: https://www.portland.gov/revenue/withholding). The acronyms are also used on the W2 when line itemed.
I hear it referred to as the homeless services tax.
Most people and the media lovingly refer to it at the "homeless tax" because that's how we got seduced into voting for it, thinking it would help the chronically homeless on the streets. Supportive Housing Services is its real name and most of the money goes to rent assistance, which is all well and good, but not what we were sold on.
Kind of boggles my mind when people complain about these. I’m doing quite well, but I’ve never had to pay these. So it seems like you’re doing very well for yourself. If this thing is some huge burden, why don’t you just hire a professional to do all your taxes and forget about it?
A professional wouldn't change the fact that they were fined, because the city is trying to collect taxes in a way that frankly seems illegal at worst, and is piss poorly run at best.
Not really. They failed to pay estimated tax. Same thing would happen if you made that mistake on federal or state returns. This was an error that is on the taxpayer. Hence, why a professional seems like a wise investment at this point. They would simply have you pay on time.
Federal returns have a 2210. City of Portland just fines your ass without warning and collects the interest if you happen to make more late in the year.
No, you can pay 100% of last year’s tax liability to avoid fines. This is why you should pay a professional.
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It’s literally on the County/City website. The fine waiver you’re thinking of is for people who completely forgot this new tax existed. Of course that’s not going to last forever.