A little-known provision in Oregon's SB1507 offers direct tax credits to small businesses that hire—but only if you know the rules.
Most Oregon professional services owners haven't heard about a tax credit buried in SB1507 that could reduce their state tax bill by up to $10,000 per year. It's real, it's available soon, and it has specific requirements worth understanding now.
Under Section 12(2)(a) of SB1507, Oregon offers a $1,000 tax credit for each net new job you create in the state. You can claim up to 10 jobs per year—meaning a maximum of $10,000 in annual credits. The credit reduces your Oregon income tax or corporate excise tax liability dollar-for-dollar, directly lowering what you owe.
The catch: the jobs must pay at least 150% of Oregon's minimum wage. This isn't the federal minimum. Oregon's minimum wage varies by region and adjusts annually, so a job paying $20 per hour in Portland would need to pay roughly $30 or more to qualify. The intent is to encourage hiring at wages above the state baseline.
The credit applies to net new jobs—meaning jobs that didn't exist in your business before. If you're a consulting firm, accounting practice, engineering office, or other professional services business, you're eligible if you:
• Create positions that are genuinely new to your Oregon payroll
• Pay those positions at least 150% of the applicable Oregon minimum wage
• Get certification from the Oregon Business Development Department
• File during a tax year beginning January 1, 2026 or later
The certification step matters. You'll need to work with OBDD to document the new jobs and wage levels before claiming the credit on your return.
This credit is available for tax years beginning on or after January 1, 2026, and ending before January 1, 2032. That's a six-year window. After 2031 tax year, the credit expires unless Oregon extends it.
The $10,000 annual cap (10 jobs × $1,000) is per business entity. If you have multiple entities, each may have its own limit, but verify this with a tax professional familiar with Oregon's rules.
If you're planning to expand your Oregon team over the next few years, this credit is worth factoring into your hiring timeline and structure. A $1,000-per-job credit reduces your effective cost of hiring. For a professional services firm on tight margins, that's meaningful.
However, don't hire just for the credit. The wage requirement (150% of minimum) means you're already paying competitively, and the credit is a bonus—not the reason to hire. Use it as a planning tool when you're already considering growth.
Start conversations with your accountant or tax advisor now. They'll need to understand your hiring plans for 2026 and beyond, and they should be familiar with OBDD's certification process before you need it.
Source: Oregon SB1507, Section 12(2)(a), Page 3; Section 14 (effective dates)