OAR 150-316-0237
Employees Exempt from Withholding

(1) Expiration for election. An election for exemption from withholding expires on February 15 of the calendar year following the year of the election. An individual must provide a new exemption certificate to the employer to claim an exemption from withholding for any subsequent tax year.
(2) Exemption requirements. An individual claiming exemption from withholding must meet one of the following requirements:
(a) The individual’s wages must be exempt from Oregon taxation; or
(b) The individual must meet the qualification for having no tax liability.
(3) Qualifications for no tax liability. An individual claiming exemption from withholding due to no tax liability must meet the following conditions:
(a) For the previous tax year, the individual had the right to a refund of all Oregon tax withheld because the individual had no tax liability; and
(b) For the current tax year, the individual expects a refund of all Oregon income tax withheld because the individual expects to have no tax liability.
(4) Specific Employees Exempt from Withholding.
(a) Military pay in the Armed Forces of the United States. See ORS 316.792 (Military pay).
(b) Common carrier employees. Public Law 101-322 and ORS 316.162 (Definitions for ORS 316.162 to 316.221)(2)(b) exempt from state withholding railroad, motor, and air carrier employees unless they are Oregon residents. OAR 150-316-0173 (Gross Income of Nonresidents; Federal Laws Affecting Nonresident Employees of Motor, Rail, Air and Water Carriers) contains definitions and examples of common carrier employees. Public Law 91-569 and ORS 316.162 (Definitions for ORS 316.162 to 316.221)(2)(b) exempt from state withholding nonresident air carrier employees unless they earn 50 percent or more of their compensation in Oregon. Employees whose scheduled flight time in Oregon is more than half of their total flight time for the year are considered to have earned more than half of their compensation in Oregon. The employees covered are those actually involved in transportation activities in more than one state.
(c) Domestic service. The exemption in ORS 316.162 (Definitions for ORS 316.162 to 316.221)(2)(c) does not apply to wages paid to an employee who performs both domestic and business services, such as the chauffeur who also transports his employer’s business clients, the domestic cook who also prepares meals for other employees or the paying public, etc.
(d) Casual labor. Withholding is not required from wages paid for casual labor not in the course of the employer’s trade or business. Withholding is required from wages for substantial labor not in the regular course of the employer’s trade or business, such as the construction of a private home where the owner is the employer. Labor which is both casual and not in the course of the business or trade of the employer is exempt from withholding requirements. “Business,” as used in this section, is given a broader interpretation than “activity for profit” and includes governmental as well as proprietary functions of the state government or any of its political subdivisions.
(e) Agricultural services. Labor rendered solely in connection with the planting, cultivating, or harvesting of “seasonal agricultural crops” is exempt from withholding if the total annual wages paid the employee are less than $300. If at least $300 is received by the employee during the calendar year, the withholding and payments must have been timely made.
(A) A “seasonal agricultural crop” is a crop dependent upon an annual or less season for its fruition, and which is harvested at the termination of its season or shortly thereafter.
(B) Seasonal agricultural crops include:
(i) Field and forage crops.
(ii) The seeds of grasses, cereal grains, vegetable crops and flowers.
(iii) The bulbs and tubers of vegetable crops.
(iv) Any vegetable or fruit used for food or feed.
(v) Holly cuttings harvested annually for Christmas sales.
(C) Labor performed in connection with the following are not exempt from withholding:
(i) Forest products.
(ii) Landscaping.
(iii) Nursery stock as defined in ORS 571.005 (Definitions for ORS 571.005 to 571.230)(5) unless planted, cultivated, and harvested within an annual period.
(iv) Raising, shearing, feeding, caring for, training or management of livestock, bees, poultry, fur-bearing animals or wildlife.
(D) Withholding is required as to the entire wages of “regular” farm employees even though, as a part of their duties, they engage in planting, cultivating, or harvesting. Withholding is required as to all wages paid in such seasonal activities as canning, or other food processing, logging, and sheep shearing, because they are not solely in connection with the planting, cultivating, or harvesting of seasonal agricultural crops. Withholding is required as to all wages paid in such agricultural activities as the care of poultry or livestock, and dairy farming, because they are not in connection with the planting, cultivating or harvesting of seasonal agricultural crops.
(f) Minister. Withholding is not required from wages paid to a duly ordained, commissioned, or licensed minister of a church when performing the duties of the minister’s ministry, or from wages of a member of a religious order in performance of the religious duties required by the order, when the duties are not commercial in nature. Any amounts received from services performed outside of the order, and where a legal relationship of employer and employee exists between a member of a religious order or a minister and a third party, are considered income and are subject to withholding. For example, a member of a religious order has been hired by a school to teach a class for a fee. That member becomes an employee of the school and the wages are subject to withholding (pursuant to IRS Publication 525).
(g) Real Estate Salespeople. Withholding is not required from services provided to real estate brokers by real estate salespeople if there is a written contract providing the salesperson will not be treated as an employee by the real estate broker with respect to the services provided for Oregon tax purposes. Their income from commissions is not subject to state withholding taxes.[Publications: Publications referenced are available from the agency.]

Source: Rule 150-316-0237 — Employees Exempt from Withholding, https://secure.­sos.­state.­or.­us/oard/view.­action?ruleNumber=150-316-0237 (accessed May 26, 2025).

150–316–0006
Application of Capital Losses and Capital Loss Carryforwards 150–316–0007
Policy — Application of Various Provisions of the Federal Internal Revenue Code 150–316–0009
Policy — Application of Various Provisions of Tax Law to Domestic Partners 150–316–0015
Adoption of Federal Law 150–316–0020
Tax Reform Act of 1984 Adjustments 150–316–0025
Definition: “Resident” 150–316–0027
Status of Individuals in a Foreign Country 150–316–0035
Oregon Net Operating Losses — Treatment After 1984 150–316–0040
Administrative and Judicial Interpretations 150–316–0043
Qualified Business Income Reduced Tax Rate (QBIRTR) 150–316–0045
Taxable Income of Nonresidents and Part-year Residents 150–316–0050
Farm Capital Gain 150–316–0055
Transitional Provision to Prevent Doubling Income or Deductions 150–316–0060
Taxable Income of Resident 150–316–0065
Social Security and Railroad Retirement Benefits Eligible for Subtraction 150–316–0080
Credit for Income Taxes Paid to Another State 150–316–0082
Credit for Taxes Paid to Another State When Paid by a Pass-Through Entity 150–316–0084
Credit for Income Taxes Paid to Another State — Computation 150–316–0086
Credit for Income Taxes Paid to Other States — Proof Required and Procedure for Obtaining the Credit 150–316–0088
Addition of Taxes Paid to Another State Claimed as an Itemized Deduction 150–316–0090
Credit for Duplicative State Taxation Relating to Different Years 150–316–0115
Disabled Child Exemption Credit 150–316–0120
Credit for Political Contributions 150–316–0125
Credit for the Gain on the Sale of a Residence Taxed by Another State 150–316–0130
Credit for Installation of Alternative Energy Devices 150–316–0135
Proration of Income and Deductions for Nonresidents and Part-Year Residents 150–316–0145
Proration for Pass-through Entity Income of Part Year Oregon Residents 150–316–0150
Separate or Joint Federal Returns for Spouses in a Marriage 150–316–0155
Nonresident Partners: Guaranteed Payments 150–316–0157
Nonresident Partners: Other Methods of Allocation and Apportionment 150–316–0165
Gross Income of Nonresidents 150–316–0167
Gross Income of Nonresidents 150–316–0169
Gross Income of Nonresidents 150–316–0171
Gross Income of Nonresidents 150–316–0173
Gross Income of Nonresidents 150–316–0175
Gross Income of Nonresidents 150–316–0179
Student Loan Interest Deduction — for Part-Year and Nonresidents 150–316–0181
Moving Expense Deduction — for Part-year and Nonresidents 150–316–0183
Gross Income of Nonresidents 150–316–0185
Gross Income of Nonresidents: Waterway Workers 150–316–0195
Alimony Deduction — for Part-Year and Nonresidents 150–316–0197
Nonresident Deduction for Contributions to IRA, Keogh, or Qualified Medical Savings Accounts 150–316–0205
Credit for Taxes Paid to State of Residence 150–316–0225
Retirement Income Credit 150–316–0230
Subtraction for Previously Taxed Contributions 150–316–0234
“Withholding Statement” and “Exemption Certificate” 150–316–0235
Withholding: Basis of Amount Withheld 150–316–0237
Employees Exempt from Withholding 150–316–0239
Withholding on Fringe Benefits 150–316–0241
Independent Contractor Definition 150–316–0243
Personal Liability of Responsible Officers, Members, or Employees for Taxes Withheld 150–316–0250
Bonding Requirements for Delinquent Withholding Employers 150–316–0255
Withholding by Employers 150–316–0257
Employer’s Election of Method of Computing Withholding 150–316–0265
Withholding Payments: Cash Basis 150–316–0267
Additional Time to File Reports 150–316–0275
Treatment of Payroll Based Program Overpayments 150–316–0282
Exemptions for Military Personnel 150–316–0284
Penalty 150–316–0290
Procedure for Correcting the Filing of Withholding Certificates 150–316–0295
Credit for Tax Withheld 150–316–0297
Where Taxpayer Reports on Fiscal Year Basis 150–316–0305
Withholding Income Taxes on IRAs, Annuities, and Compensation Plans 150–316–0307
Withholding Income Taxes on IRAs, Annuities, and Compensation Plans 150–316–0315
Alternative Withholding Payment Method for Employers to Avoid Undue Burden 150–316–0320
Voluntary Withholding for Retired Members of the Uniformed Services 150–316–0325
Voluntary Withholding for Civil Service Annuitants 150–316–0330
Semiannual Reports and Payments 150–316–0332
Withholding: Payment Due Dates 150–316–0334
Withholding Tax Payment Requirements for Agricultural Employers 150–316–0336
Employee’s Rights 150–316–0345
Requirement to use Electronic Funds Transfer 150–316–0347
Electronic Funds Transfer. Payroll taxes and corporation estimated income and excise taxes not combined in determining mandate. Payments to be included. 150–316–0355
Withholding: Payment and Reports 150–316–0357
Waiver of Termination Reports 150–316–0359
Withholding: Annual Report by Employer 150–316–0361
Combined Reports and Statewide Transit Tax Reports: Agricultural Employers 150–316–0370
Liability for Unpaid Withholdings 150–316–0372
Officer Liability: Joint Determination of Liability Conference 150–316–0380
Withholding Penalties 150–316–0385
Nonresident Alternate Filing 150–316–0390
Deductions Allowed on Either the Inheritance Tax Return or the Fiduciary Income Tax Return 150–316–0395
Tax Treatment of Unincorporated Organization 150–316–0400
Resident and Nonresident Estates and Trusts 150–316–0402
Oregon Qualified Trust Tax Return 150–316–0410
Fiduciary Adjustment 150–316–0415
Accumulation Distribution Credit for Oregon Taxes Paid by Trust During Income Accumulation Years 150–316–0420
Taxable Income of Nonresident Estate or Trust 150–316–0425
Oregon Multiple Funeral Trust Tax Return 150–316–0427
Persons Required to Make Returns 150–316–0435
Petitioning Department to Equally Split Joint Liability 150–316–0440
Innocent Spouse, Separation of Liability, and Equitable Relief Provisions 150–316–0445
Liability of Fiduciaries 150–316–0450
Decedent’s Estate: Request for a Final Tax Determination 150–316–0452
Decedents’ Estate: Application for Discharge from Personal Liability for Tax on Decedent’s Income 150–316–0465
Estimated Tax 150–316–0470
Allocation of Joint Estimated Tax Payments 150–316–0475
Estimated Tax: Farmer’s and Fisher’s 150–316–0480
Estimated Tax: Application of Prior Year Overpayment (Refund) 150–316–0485
Tax Used to Compute Underpayment of Estimated Tax 150–316–0487
Estimated Tax: Underpayment Interest Not Imposed if There is a Casualty, Disaster or Other Unusual Circumstances 150–316–0489
Estimated Tax: Underpayment Interest Not Imposed If There Is Reasonable Cause 150–316–0491
Estimated Tax: Partnership and S Corporation Income of Part-year Residents and Nonresidents 150–316–0493
Required Installments for Estimated Tax 150–316–0495
Estimated Tax: Joint Return to Single or Separate Return 150–316–0497
Estimated Tax: Single or Separate Returns to Joint Return 150–316–0505
Oregon Lottery Winnings and Losses 150–316–0507
Modification of Federal Taxable Income: Interest and Dividends 150–316–0509
U.S. Government Obligations 150–316–0511
Addition for Original Issue Discount (OID) 150–316–0513
Modification of Federal Taxable Income: Adding Interest or Dividends of the United States Exempted by Federal Income Tax Law 150–316–0515
Modification of Federal Taxable Income: Adding Federal Estate Tax Attributable to Income in Respect of a Decedent Not Taxable by Oregon 150–316–0519
Gain or Loss Upon the Sale of State and Municipal Bonds of Other States (Foreign States) 150–316–0525
U.S. Government Interest in Retirement Accounts 150–316–0530
Pool of Assets that Qualify to Pay State Exempt-Interest Dividends 150–316–0535
Federal Tax Deduction: Accrual Method of Accounting Required 150–316–0537
Adjustment of Federal Tax Liability 150–316–0545
Election to Include Child’s Unearned Income — Addition Required 150–316–0550
Special Oregon Medical Subtraction 150–316–0555
Modification of Federal Taxable Income: Itemized vs. Standard Deduction 150–316–0557
Modification of Federal Taxable Income: Oregon Income Tax Claimed as an Itemized Deduction 150–316–0559
Modification of Federal Taxable Income: Previously Taxed Contributions to Pension or Annuity 150–316–0565
Basis of Depreciable Assets Moved into Oregon 150–316–0567
Property Subject to Accelerated Cost Recovery System 150–316–0569
Adjustment to Income for Basis Differences 150–316–0575
Amount Specially Taxed Under Federal Law to Be Included in Computation of State Taxable Income: Accumulation Distributions 150–316–0580
Definition for Severely Disabled Exemption 150–316–0585
Exemption for Blind and Severely Disabled 150–316–0590
Substantiation for Permanently Severely Disabled 150–316–0595
Exempt Income of Native Americans 150–316–0600
Oregon Investment Advantage Apportionable Income Exemption 150–316–0605
Military Pay Subtraction 150–316–0607
First-time Home Buyer Savings Account 150–316–0610
Road Construction Worker’s Travel Expenses 150–316–0615
Substantiation Required for Construction Worker and Loggers Expenses 150–316–0625
(Miscellaneous) Valuation of Forest Land or “Farm Use” Land for Oregon Inheritance Tax Purposes 150–316–0630
Scholarship Awards used for Housing Expenses 150–316–0635
Subtraction for Land Contributed to Educational Institutions 150–316–0640
Subtraction for Qualified Investment of Severance Pay 150–316–0650
Waiver of Frivolous Return Penalty Imposed Under ORS 316.992 150–316–0652
Frivolous Return Penalty

May 26, 2025

Rule 150-316-0237's source at or​.us