| Survivor's Information |
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The following information is designed to help you if you are settling the finances of a deceased person. It is not a complete statement of laws and Oregon Department of Revenue rules.
If you have other questions after reading this information, please see your attorney. Some of these matters are complex. You may need legal advice.
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| Section 1: Definitions |
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Beneficiary: One who will receive assets from an estate. The assets of an estate are distributed to all beneficiaries after all taxes and expenses are paid. The assets may be distributed under the terms of a will, or if there is no will, under the provisions of state law. (Other terms: heirs at law, devisee, legatee, and claiming successor.)
Decedent: A legal word for a person who has died.
Discharge from Personal Liability: The personal representative may file an application for discharge from personal liability for income tax on the decedent's income. The discharge becomes effective nine months after filing.
Election for a Final Tax Determination: An election for a final tax determination may be filed by the personal representative with the filing of an individual or fiduciary income tax return. This requires the department to issue a Notice of Deficiency within 18 months from the date the election is filed.
Estate: All the property of the decedent. (See probate and small estate proceeding.) If an estate is probated, the court appoints a personal representative to be responsible for the property and finances of the estate. Any money the estate earns (such as rental income or stock dividends) must be reported on a fiduciary income tax return, Oregon Form 41.
Executor: An executor is a personal representative, administrator, trustee, fiduciary, or custodian of the property, or any person who has actual or constructive possession of the decedent's property.
Fiduciary: An individual or legal group (such as a bank or corporation) that has financial responsibility for an estate or a trust held for the benefit of others.
Personal property: All property that isn't real property, such as money, stocks, bonds, machinery, or equipment. A mobile home on rented or leased land is also personal property.
Personal representative: The executor, administrator, or anyone in charge of the decedent's property. The surviving spouse may or may not be the personal representative, depending on the will or the court appointment. The personal representative is also the estate's fiduciary.
Probate: A formal court proceeding used when the decedent held property solely in the decedent's name. Probate settles the decedent's finances and distributes the property according to the will or state law. The probate court appoints a personal representative.
Probate court: In Oregon, this is generally the circuit court. In some cases it may be the county district court or the county court.
Real property: Real property is land and buildings. For example, a residence is real property.
Small estate proceeding: A court procedure to transfer the title of solely owned property to the heirs if the estate consists of:
- Personal property with a fair market value of $50,000 or less; or
- Real property with a fair market value of $150,000 or less; or
- A combination of personal property with a fair market value of $50,000 or less and real property with a fair market value of $150,000 or less.
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| Section 2: Common Questions |
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Inheritance Tax
Should I file an inheritance tax return?
Oregon's filing requirements are different from the federal government's. If the gross estate is more than Oregon's filing requirement, you must file an Oregon return even if you do not have to file a federal return.
Filing requirements:
- For 2006 and after, an estate with a gross value of $1 million or more. The unified credit amount is $345,800.
- For 2005, an estate with a gross value of $950,000 or more. The unified credit amount is $326,300.
- For 2004, an estate with a gross value of $850,000 or more. The unified credit amount is $287,300.
- For 2003, an estate with a gross value of $700,000 or more. The unified credit amount is $229,800.
For tax years 2001 and before, the Oregon inheritance tax return (Form IT-1) was required to be filed whenever a federal estate tax return (Form 706) was required. For deaths on or after January 1, 2002, Oregon's filing requirements are different from the federal filing requirements. For 2002, a return is required if the taxable estate is $1 million or more. The unified credit amount is $192,800 for 2002.
Who should file the return?
If the estate is probated in Oregon, the personal representative is responsible for filing the inheritance tax return. If the estate isn't probated, the return should be completed by the surviving spouse or the person or persons who have control of the decedent's property.
What form do I file?
File Form IT–1, Oregon Inheritance Tax Return.
When do I file?
You must file within nine months after the date of the decedent's death. An extension of time granted by the Internal Revenue Service for filing the federal estate tax return will be accepted for Oregon. Interest will continue to accrue on any tax due during the extension period.
If inheritance tax is unpaid as of the due date, including an extension, add a delinquency penalty of 5 percent of the tax.
A late filing penalty of 5 percent is imposed if the return is not filed by the due date, including any extension. An additional 20 percent penalty is imposed if the return is filed more than three months after the original or extended due date.
Where do I send the return?
Send the completed inheritance tax return to the address shown at the bottom of Oregon Form IT-1, page 3.
Please see inheritance information.
Personal Income Tax
Should I file a personal income tax return for the decedent?
File an Oregon income tax return for the decedent if:
- The decedent had enough income to require filing for the part of the year he or she was alive; or
- The decedent is entitled to a refund of tax withheld or estimated tax payments.
If you must file a return, be sure to check the "deceased" box.
Who should file the return?
The person responsible for the decedent's finances should file and sign the return as "personal representative." If it is a joint return, the spouse must also sign it. If no personal representative has been appointed, the surviving spouse should sign a joint return as "surviving spouse."
If you are the decedent's spouse, you may file a joint income tax return for the year your spouse died. Indicate on the return that your spouse is deceased.
On a joint return, report the decedent's income only up to the date of death, plus the surviving spouse's income for the full year.
If you remarried before the end of the tax year in which your spouse died, you may file jointly with your new spouse. Your deceased spouse's filing status is "married filing separately" for that year.
What form should I file?
Use the Oregon form that would have been used if the decedent were alive. The Oregon tax booklet and instructions will help you determine which form to use.
When should I file?
The filing deadline is the same as if the decedent were alive. Generally, that is April 15 of the year following the year of death.
Note: Do not file a personal income tax return for the year after the date of death.
Where should I send my return?
Send the completed return to the address shown at the bottom of the form.
Fiduciary Income Tax
What is fiduciary income tax?
Fiduciary income tax is the tax due on income earned by the estate. The estate is a taxable entity, separate from the decedent and the beneficiary. For example, the estate may earn interest or dividend income, or rental income from estate assets. The fiduciary income tax return must report:
- Income from property held by the probated estate; and
- Income received by the estate on behalf of the decedent (such as salaries or fees owed to the decedent but unpaid at the time of death); and
- Installment gains from sales completed before death.
Should I file a fiduciary income tax return?
If an estate is probated, a fiduciary income tax return must be filed if the estate had $600 or more of gross income during the tax year. If the estate isn't probated, file a fiduciary return with Oregon only if the Internal Revenue Service required a federal fiduciary return. Otherwise, don't file this return. Instead, the beneficiaries will report the income earned by the decedent's property on their personal income tax returns, as if they had received the income in their names.
What form do I file?
File Form 41, Oregon Fiduciary Income Tax Return and Form 1041, U.S. Income Tax Return for Estates and Trusts.
When do I need to file?
Returns for an estate or trust are due on or before the 15th day of the fourth month following the close of the tax year of the estate or trust. An extension of time granted by the Internal Revenue Service for filing the federal fiduciary tax return will be accepted for Oregon.
Where should I send the Oregon fiduciary income tax return?
Send the completed return to the address shown at the bottom of Form 41.
Property Taxes
Will the estate owe property taxes?
The estate may owe property taxes due to delinquencies or deferred taxes. Either the personal representative of the estate or the person succeeding to the decedent's property should check with the assessor and the tax collector in each county where the decedent owned real or personal property. If the estate is probated, any taxes due will be paid out of the estate before the estate is distributed to the beneficiaries.
How do I know if my property taxes were deferred?
Property taxes may have been deferred if the property owner was:
- Age 62 or older; or
- Disabled and eligible to receive federal Social Security disability benefits.
If the taxes were deferred, the state will have recorded a lien against the property. Check the mortgage records in the county clerk's office for verification. The county assessor or tax collector may know if property taxes have been deferred. Deferred taxes and interest must be paid when a property owner dies. For the account balance, call the Oregon Department of Revenue at 503-378-4988.
As an heir, when is the right time for me to pay deferred taxes?
Unless you are a surviving spouse, all of the deferred taxes and accrued interest become due to the Oregon Department of Revenue August 15 of the year following the death. If you are a surviving spouse, you may qualify to continue the deferral (see the next question). You may arrange a repayment schedule with the department if:
- You are not a surviving spouse;
- You inherit the property; and
- You make the property your principal residence by August 15 of the year following the death.
May I continue the property tax deferral if I am the surviving spouse?
Yes, with some conditions. You do not need to file a new deferral application if:
- You and your spouse each qualified for the deferral at the time of your original application and you filed a joint application for the deferral; and
- You both signed the original application; and
- You continue to meet the deferral program requirements.
In this case, your past property taxes will continue in deferral and the department will continue to pay your future property taxes.
If you did not file jointly with your spouse (even though you were qualified at the time) and you were 59-1/2 or older at the time of your spouse's death, you must meet the deferral requirements and file a surviving spouse application. Once the department approves your application, your account continues as active and the department continues to pay your property taxes.
If you were younger than 59-1/2 at the time of your spouse's death, you may file a surviving spouse application. Because of your age, your deferral account becomes inactive. The account balance remains deferred and interest on the past-deferred taxes continues to accrue. By law, the department cannot pay your current and future property taxes; you are responsible to pay these taxes. You may reapply to activate the deferral when you reach age 62, or you become eligible to, or begin to, receive federal Social Security Disability benefits. You also must continue to meet the other deferral qualifications. When the department approves your application, your account becomes active again and the department will pay your future property taxes.
If you file a surviving spouse application, you must file the application with your county assessor's office by April 15 of the year following the taxpayer's death.
Property taxes were not deferred. May I defer my future property taxes?
You may apply at your county assessor's office to defer property taxes if you meet all of the following conditions:
- You are age 62 or older or you are disabled and eligible to receive, or are receiving, federal Social Security disability benefits;
- You have a recorded deed or contract giving you fee-simple ownership;
- You use the property as your principal residence;
- Your prior year's total household income is less than the maximum limit. This limit may change each year; and
- You file an application with your county assessor between January 1 and April 15.
Once you're in the program, your annual federal adjusted gross income must stay below the fixed limit to defer all of the next year's taxes. This limit may change each year. If your income exceeds the limit, part of the property taxes may still be deferred.
Oregon Property Tax Deferral for Disabled and Senior Citizens (150-490-675) is available on our Web site. Or call 503-378-4988 to order it.
Veteran's Property Tax Exemption
Who is eligible?
If you are the surviving spouse of a war veteran, you may be eligible for a property tax exemption on your home. You may be eligible even if the veteran wasn't eligible while he or she was alive. You must own the property and live on it. You must be a widow or widower who hasn't remarried.
What is the exemption?
You may exempt up to $15,000 of the assessed value of your home and its related property from property taxation. Or you may exempt up to $18,000 if the veteran died as a result of a service-connected injury or illness or if the war veteran received at least one year of the maximum exemption amount. The exemption in either case is first applied to your real property. If your real property is assessed for less than the total exemption allowed, the exemption will be applied first to your real property and then to your taxable personal property. For each tax year beginning on or after July 1, 2006, the exempt amount increases by 3 percent per year.
When should I file for an exemption?
File on or before April 1. If you acquire property after March 1 and before July 1, the filing deadline is 30 days after the date of acquisition. If the veteran died during the prior tax year, the surviving spouse can file for the exemption at any time during the current tax year.
How do I file?
You may get a claim form from your county's assessor's office. Mail the completed form to your county assessor. The publication Disabled War Veteran or Surviving Spouse Property Tax Exemption (150-310-676) is available on our Web site. Or call 503-378-4988 to order it.
Elderly Rental Assistance (ERA)
What is the Elderly Rental Assistance program?
The Elderly Rental Assistance program (ERA) benefits low-income senior citizens. To qualify, you must meet all of the following requirements:
- Be 58 or older during the year;
- Have a household income less than $10,000;
- Pay rent in Oregon;
- Pay at least 20 percent of your household income for rent plus fuel and utilities;
- Own household assets of less than $25,000 (if you and your spouse are under age 65); and
- Live on property that is subject to property taxes or makes a payment in lieu of taxes (PILOT); and
- Lived in Oregon on the last day of the year.
May I file for Elderly Rental Assistance on behalf of the decedent?
No, you may not file for ERA on behalf of a deceased person. However, if the decedent filed an ERA claim before he or she died, the heir is eligible to receive the payment. File Form 243, Claim to Refund Due a Deceased Person, so the department can issue the check in your name. If there is no court-appointed or certified personal representative, you may file if you rented your personal residence jointly with the decedent and you qualify for ERA.
When is the deadline for filing an ERA claim?
The deadline for filing an ERA claim (Form 90R) is July 1. If you file Form 90R after July 1, your claim will be processed and payment will be issued the following year.
When is the check issued?
The issue date is November for claims received by July 1.
Can roommates file for ERA?
Yes. The assistance is based upon the rent, fuel, utilities, household income, and assets of each person who files Form 90R.
What factors affect the amount paid?
Oregon sets aside money for the Elderly Rental Assistance program each year. When there is not enough money to fully pay all the claims that were received by July 1, all payments will be reduced.
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| Section 3: Additional Forms |
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You may need the following Oregon forms:
- Election for Final Tax Determination and Application for Discharge from Personal Liability for Tax of a Decedent's Estate (150-101-151)
- Fiduciary Income Tax Return, Form 41 (150-101-041)
- Schedule P, Part-Year Resident Trust Computation of Tax (150-101-051)
- Inheritance Tax Return, Form IT-1 (150-103-001)
- Income Tax Return, Form 40 (150-101-040)
- Income Tax Return (Short Form), Form 40S (150-101-044)
- Elderly Rental Assistance (ERA), Form 90R ERA (150-545-002)
- Income Tax Return, Form 40N (150-101-048)
- Income Tax Return, Form 40P (150-101-055)
You can request forms by writing to:
Forms
Oregon Department of Revenue
PO Box 14999
Salem OR 97309-0990
Taxpayer assistance
General tax information
Salem: 503-378-4988
Toll-free from an Oregon prefix: 1-800-356-4222
Asistencia en español
Salem: 503-378-4988
Gratis de prefijo de Oregon: 1-800-356-4222
TTY (hearing or speech impaired; machine only):
Salem: 503-945-8617
Toll-free from an Oregon prefix: 1-800-886-7204
Americans with Disabilities Act (ADA): Call one of the help numbers for information in alternative formats.
Internal Revenue Service: www.irs.gov
Updated December 2007
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