A tax credit buried in SB1507 rewards Oregon professional services firms that hire—but only if they know the rules and plan ahead.
Most Oregon professional services owners haven't heard about a tax credit in SB1507 that could put real money back in their business. It's not advertised, it requires advance approval, and it has specific rules. But if you're planning to hire, understanding it now could mean thousands in tax savings starting next year.
Under Section 12 of SB1507, Oregon employers can claim a $1,000 nonrefundable income or excise tax credit for each net new job created, up to 10 jobs per year. To qualify, the job must pay at least 150% of Oregon's minimum wage. The credit is capped at $10,000 per taxpayer annually and $12.5 million statewide.
This applies to tax years beginning on or after January 1, 2026, and before January 1, 2032. That six-year window is your opportunity to plan.
If you run a professional services firm—accounting, consulting, engineering, legal services, or similar—and you're considering hiring, this credit is worth calculating into your decision. The wage floor (150% of minimum wage) matters: it means entry-level positions won't qualify, but most professional roles will.
The credit is nonrefundable, meaning it reduces your tax liability but won't generate a refund if it exceeds what you owe. However, unused credit carries forward for up to three subsequent tax years, so if you don't use the full $10,000 in one year, you're not locked out.
Here's the catch that matters most: you cannot simply claim this credit when you file your taxes. The Oregon Business Development Department must pre-certify your job creation before you can claim the credit. This means you need to apply and get approval before—or very early in—the tax year you're claiming the credit for.
This is not optional. Without pre-certification, the credit is not available. If you're planning to hire in 2026, you'll need to understand the application process and timeline well before January 1, 2026.
If you've been on the fence about adding staff, this credit reduces the net cost of hiring. On a $60,000 salary (well above 150% of minimum wage), you'd save $1,000 in taxes per hire, up to $10,000 annually if you bring on 10 new employees. Over the six-year window, that's meaningful.
The statewide cap of $12.5 million suggests the state expects significant uptake, so early applicants may have an advantage if demand exceeds the pool. The three-year carryforward also gives you flexibility if your hiring plans shift year to year.
Start by confirming your payroll meets the wage threshold and contacting the Oregon Business Development Department about the pre-certification process. The rules are straightforward, but the timing is not forgiving.
Source: Oregon SB1507, Section 12, Page 3. For industry-specific guidance on how this applies to your firm, consult a tax professional or your trade association.