State & Local Tax

New Multnomah County’s Preschool for All Personal Income Tax

March 31, 2021

On November 3, 2020, the voters of Multnomah County approved a ballot measure establishing a tuition-free preschool program, Preschool For All (PFA). According to the County, PFA will give three and four-year-old children in Multnomah County free access to “high-quality, developmentally appropriate, culturally responsive preschool experiences.”

This program is funded through a personal income tax that became effective on January 1, 2021 at the following rates:

  • 1.5% on taxable income over $125,000 for individuals and $200,000 for joint filers, and
  • An additional 1.5% on taxable income over $250,000 for individuals and $400,000 for joint filers.

This rate will increase by 0.8% beginning in 2026. For Multnomah County residents, 100% of their Oregon taxable income will count towards these totals while the taxable income of non-residents will be based only on income earned within Multnomah County itself.


Employer Responsibilities

For Calendar Year 2021, employers will not be required to withhold this tax but must offer to withhold as soon as their payroll system is capable. Employers must communicate in writing to their employees when they can begin voluntary withholdings. Multnomah County will not assess late-payment penalties for 2021 if withholding isn’t available.

Beginning in 2022, mandatory withholding will be required of employers with a Multnomah County business location for those employees who make over $200,000 per year. Employees may elect to designate a different withholding amount or opt in/out based on their individual tax situation by completing the Metro/MultCo OPT Form.

PFA taxes and returns are managed by the City of Portland Revenue Division and must be remitted through the Portland Revenue Online (PRO) system. Through this system, employers can register for an online account, remit quarterly returns, make tax payments, and file their annual reconciliation. This is the same system business taxpayers currently use to pay City of Portland/Multnomah County Business Taxes, so a separate log-in is not required for businesses already registered. Individual taxpayers who do not have their PFA taxes withheld by their employer will also be able to create an account and remit these taxes and make estimated payments directly to the City.

PFA income tax withholding payment due dates will follow the same dates for depositing Federal and Oregon withholdings, and returns will be done on a quarterly filing basis with an annual reconciliation. Additional information can be found in the Preschool For All Employer Handbook. The online system will be available for the PFA Personal Income Tax beginning on April 1, 2021.

If you have questions related to this new tax, such as how to implement the withholding process, how to source wages to Multnomah County, or how to make tax calculations, our state and local tax (SALT) professionals are available to assist.  Please contact our SALT Team at


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