Oregon’s New Jobs Credit: A Tax Break for Businesses That Are Growing

Oregon rolled out a new tax incentive this year that is worth paying attention to if your business is adding jobs. Officially known as the Oregon Qualified Jobs Creation Tax Credit (QJCTC), the credit is effective for tax years beginning on or after January 1, 2026, and runs through tax years beginning before January 1, 2032. The application period just opened on September 1st and runs through October 31, 2026.

Employers must apply for certification through Business Oregon, which reviews applications with certification letters anticipated by January 15.

It gives employers a $1,000 credit against Oregon income or excise tax for each net new job created during the year. The credit maxes out at 10 new positions per taxpayer per year, so a business that adds 10 or more qualifying jobs can shave up to $10,000 off its Oregon tax bill. The credit cannot exceed your actual tax liability for the year, but if you cannot use it all, you have three years to carry it forward.

Key Program Details

• Application Window: Applications for the initial certification window are open through October 31, 2026.
• Wage Requirement: New positions must pay compensation equal to or greater than 150% of the applicable county minimum wage.
• Credit Type: The QJCTC is a nonrefundable personal and corporate income tax credit that can be carried forward for up to three successive tax years.
• Annual Cap: The program is capped at $12.5 million statewide per tax year and runs through 2031.
• Approval Process: Employers must apply for certification through Business Oregon, which reviews applications, with certification letters anticipated by January 15. Businesses can review the program requirements and submit an application through the Business Oregon Qualified Jobs Creation Tax Credit webpage.

Not every business qualifies. Oregon targeted this credit at specific sectors it wants to grow, and a business’s primary activity must fall within one of seven “qualified industries”: advanced manufacturing, bioscience and biotechnology, clean technology, food and beverage processing, forestry and wood products, high technology, and outdoor gear and apparel.

Each industry is defined under Or. Admin. R. § 123-670-0011 using specific four-digit NAICS codes, so it is worth checking where your business lands before assuming you qualify. One thing to watch: companies that just provide services or supplies to a qualifying industry do not get to ride those coattails. The business itself has to operate within the sector.

Corporate headquarters and administrative offices can qualify, but only if the taxpayer can show its underlying operations are principally in a qualified industry. There is also a wage floor. Each new position needs to pay at least 150% of Oregon’s applicable minimum wage under Or. Rev. Stat. § 653.025.

The way Oregon measures “net new jobs” is something employers should understand early. The calculation compares average annual covered employment for the 12 months ending June 30 of the calendar year the tax year began against that same 12-month window from the prior year.

In other words, year-end headcount snapshots will not cut it. You need to be tracking employment throughout the measurement period. Businesses that went through a merger, acquisition, or reorganization during or between those windows have to follow a separate methodology under Or. Admin. R. § 123-670-0080, which is designed to make sure the credit reflects real job growth and not just headcount gained through a deal.

Before claiming the credit on a return, businesses need to get written certification from the Oregon Business Development Department, also known as Business Oregon. The application requires an attestation that the business operates in a qualified industry, created the necessary net new jobs, and met the wage requirement.

Each entity applies separately, and a consolidated group cannot file one application for the whole group. Partnerships and S corporations can apply too, with the credit passing through to partners and shareholders.

One important constraint to be aware of is the statewide annual cap of $12.5 million on certified credits. If applications come in above that threshold, the Oregon Business Development Department will proportionately reduce the certified amounts across all qualifying applicants, so getting applications in early likely matters. Records supporting the certification need to be kept for at least five years.