How to make the Oregon PTET election.

Can your business elect?

Partnerships and S corporations, including out-of-state entities with Oregon-taxable income, if all members are individuals subject to Oregon personal income tax or pass-through entities owned entirely by such individuals. Grantor trusts qualify as members; other trusts generally do not. Sole proprietorships and single-member LLCs taxed as sole proprietorships cannot elect.

There is no member-by-member opt-in; the entity elects for all members. A single-member LLC can be a member if the entity reports the individual owner as the member, and a grantor trust can be a member.

Rate: 9% on the first $250,000 of distributive proceeds and 9.9% on the amount over $250,000.

Distributive proceeds from Oregon sources (ordinary business income, rental income, guaranteed payments for partnerships, interest, dividends, royalties, net capital gains, and other income), apportioned for multistate entities. Separately stated deductions such as Section 179 expense are not subtracted.

Available for 2026. Senate Bill 1510 (Oregon Laws 2026, chapter 75, effective June 5, 2026) extended the program, created by Senate Bill 727 in 2021, through tax years beginning before January 1, 2028. New to PTET? See how the election works.

Deadlines

These dates are for a calendar-year business. Pay at least two business days early, since state payment sites slow down on deadline days.

Electing, step by step

Deadline: Made by filing the 2026 Form OR-21 with the Election box checked by the due date including extensions: April 15, 2027, or October 15, 2027 if extended. Late returns are not accepted, so no election is made.

Start with 2025 Form OR-21 Instructions, from the Oregon Department of Revenue.

1. Register the entity for a PTE-E account in Revenue Online before making any estimated payment. Registration is not the election.
2. Prepare the 2026 Form OR-21, Oregon Pass-through Entity Elective Tax Return, in Revenue Online or approved software. It can only be filed electronically.
3. Check Box 1, 'Election.' Checking it states that all members agreed to the election, or that the filer is an officer, manager, or member authorized to make it.
4. Include Schedule OR-21-MD with the return.
5. File by April 15, 2027, or by the extended due date if a federal extension was requested. Returns filed after the due date, including extensions, are not accepted, so no election is made.

1

Paying the tax, step by step

Required if the entity expects to owe $1,000 or more. The department's PTE-E page says that for tax year 2026 only, the first and second installments are both due June 15, 2026, followed by September 15, 2026 and January 15, 2027; a waiver can be requested if timely payments are still charged interest. The safe harbor is the lesser of 90% of the 2026 tax or 100% of the 2025 tax (prior-year option only if a 2025 return was filed).

What you need

• Nothing to set up. Revenue Online takes payments without an account.
• The entity's PTE-E account in Revenue Online (and its account number to pay without logging in).
• The entity's FEIN.
• Bank routing and account numbers for ACH debit, or a credit card.

Start at Revenue Online, Oregon's official site.

1. Register the PTE-E account in Revenue Online before the first payment.
2. Log in to the entity's Revenue Online account, or pay without logging in using the PTE-E account number.
3. Select the payment type Estimated Payment, 'Apply to upcoming tax due,' so the payment applies to the 2026 tax.
4. Pay by ACH debit or credit card.
5. To pay by mail, send a check payable to the Oregon Department of Revenue with Form OR-21-V to PO Box 14950, Salem OR 97309-0950. Do not use Form OR-21-V when paying online.

Filing the return: Form OR-21, filed electronically by April 15, 2027 (October 15, 2027 with an extension). Owners receive Form OR-21-K-1 only after the return is filed.

Claiming the credit

Members claim a refundable credit for their share of tax on Schedule OR-ASC or OR-ASC-NP using code 900, and add back the tax deducted at the entity level using code 167. Credit information comes from Form OR-21-K-1.

Good to know

• Publication OR-21-EST (updated April 1, 2026) still lists April 15, 2026 for the first installment; the department's later PTE-E page and FAQ set June 15, 2026 for both the first and second 2026 installments.
• Any member that is a C corporation, a non-grantor trust, or a partnership not wholly owned by individuals subject to Oregon personal income tax makes the entity ineligible.
• K-1s issued before the entity's OR-21 is filed can cause owner credits to be disallowed.
• A composite return (Form OR-OC) is still required for nonresidents who elect into it, and composite overpayments cannot be transferred to the PTE-E account. Estimated payments for a year with no timely return must be refunded, not moved to the next year.
• A refund of overpaid PTE-E tax appears on owners' federal Schedule K-1 as ordinary income; owners who already reported the Oregon addition can subtract it (code 387).
• Paying your personal Oregon estimates? See how to pay Oregon estimated taxes.
• Business in more than one state? Each state has a guide of its own.

Official sources

Checked October 2026 against the Oregon Department of Revenue's own publications and Senate Bill 727 (2021), as amended, most recently by Senate Bill 1510 (Oregon Laws 2026, chapter 75).

• Oregon DOR, Pass-Through Entity Elective (PTE-E) Tax page and FAQ
• Oregon DOR, 2026 Summary of Legislation (SB 1510)
• 2026 Publication OR-21-EST, PTE-E Estimated Payment Instructions
• 2025 Form OR-21 Instructions (rev. 04-01-26)
• Form OR-21-V Pass-through Entity Elective Tax Payment Voucher instructions

This guide is for general education and reflects rules as of October 2026. Tax law and agency websites change, and your situation may have details that change the answer. Please talk with your tax professional before acting on it.