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Multnomah County Preschool for All Personal Income Tax
2022 Form MC-40 Personal Income Tax Return Instructions
Full Year Resident

• View correspondence mailed to you
Important Updates • Provide Third-Party Access to your tax preparer

Policy Update (02/14/2023). On February 14, 2023, For more information and to create your account, visit
Multnomah County offered a penalty and interest amnesty Pro.Portland.gov.
for tax year 2022. Do not self-assess any underpayment
penalty or quarterly underpayment interest on your tax Publication OR-17. Multnomah County personal income
return. For more information, please visit tax closely follows Oregon personal income tax treatment.
Portland.gov/revenue/amnesty. See Publication OR-17 for more information about personal
income tax laws. It is available at
Net Operating Losses from Pass-Through Entities. www.oregon.gov/dor/forms. To the extent necessary,
Individuals are allowed a net operating loss (NOL) references in Publication OR-17 to the state of Oregon or
generated in the current year on the MC-40 to the extent the its agencies should be treated as references to Multnomah
loss is allowed on the federal and Oregon return and County and its agents.
included in Multnomah County taxable income. However, a
net operating loss deduction (NOLD), an NOL from a Individuals Required to File a Full-Year Multnomah
previous year, claimed on your federal return must be County Preschool for All (PFA) Tax Return. Every full-
added back on Schedule PTI if the NOLD is related to a year resident of Multnomah County who is required to file
pass-through entity that was subject to the Multnomah an Oregon income tax return for the taxable year and who
County Business Income Tax. reports Oregon taxable income over $200,000 using
Oregon filing status married filing jointly, head of household,
If you added back the NOL generated from a pass-through
or qualifying surviving spouse, or over $125,000 using
entity that was also subject to the Multnomah County
Oregon filing status single or married filing separately is
Business Income Tax on your 2021 return, there are two
options available: required to file a Multnomah County full-year personal
income tax return.
1. You may amend your 2021 Form MC-40 to remove
Residency. You are a full-year Multnomah County resident
the pass-through modification addition of the net
if you live within Multnomah County for the entire year. You
operating loss.
2. You may make the correction on your 2022 Form are also a full-year Multnomah County resident, even if you
MC-40 by taking a pass-through modification for the live outside of Multnomah County, if all of the following are
net operating loss that was added back in the prior true: you consider Multnomah County as your permanent
year. If you elect this treatment, make sure to attach home; Multnomah County is the center of your financial,
a statement explaining the adjustment. social, and family life; and Multnomah County is the place
you intend to return after an absence. You are still a full-
If the full net operating loss cannot be utilized in the current year resident if you temporarily move out of Multnomah
year, there is no carryforward of the net operating loss for County or move back to Multnomah County after a
Multnomah County Preschool for All Personal Income Tax temporary absence. An individual must be an Oregon
purposes. resident for taxable purposes to be a Multnomah County
resident. To determine if your place of residence is located
There’s no additional modification for the pass-through loss
within the Multnomah County tax jurisdiction, utilize the tool
allowed on the Form MC-40.
available at www.portlandmaps.com to see if Multnomah
County is listed as the county jurisdiction where the address
General Information is located.

File and Pay Online and Manage Your Tax Accounts at Filing Deadline. The filing deadline for this return is April
Pro.Portland.gov. Portland Revenue Online (PRO) allows 18, 2023.
you to:
Extensions. Multnomah County does not allow an
• Register your personal and business tax accounts extension of time to pay your tax. The submission of an
• Update your account information extension payment by the original return due date provides
• File a personal tax return an automatic six-month filing extension. If you do not have
• Make payments a tax balance due but would like to file an extension, your
• Upload supporting tax pages and documents federal and/or state extension will serve as your extension.

Page 1of ,62022 MC-40 Instructions (Rev. 03/22/2023)

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When filing your return on the extended due date, check the 
                                                                        Interest Calculation 
“Extension Filed” box on the return. If no extension payment 
                                                                         
was made, please attach a copy of your federal extension 
                                                                        Interest is calculated at 10% per annum (.00833 multiplied 
or verification of your Oregon extension payment with your 
                                                                        by the number of months). Calculate your interest from the 
return.  
                                                                        original due date to the 15th day of the month following the 
                                                                        date of the payment.  
Penalty Calculation                                                      
 
You may be subject to penalties for filing a late personal              Federal, Oregon, and Multnomah County 
income tax return or paying your income tax liability after the         Business Tax Returns 
original due  date of the return. Although             there is  a late  
penalty for both failing to file a personal tax return by the           Please submit the following forms and schedules with your 
due date and failing to pay the tax by the original due date            return. Without this information, we may disallow or adjust 
of the return, only one of these late penalties will be applied,        items claimed on your Multnomah County return. 
even if there is a failure  of both requirements. In these               
cases, only the late filing penalty is applied. For the 
                                                                        Required Supporting Oregon Tax Pages 
purposes  of penalty calculations, unpaid tax is  your tax               
liability reduced by  any  payment of tax  made  before the             Be sure to include the following Oregon tax pages and any 
original due date and any credit against tax that is claimed            associated statements when submitting your return: 
on the return.                                                           • Form OR-40, pages 1-4 
                                                                         • Schedule OR-ASC (if filed) 
                                                                         • Schedule OR-K-1(s) (if  Multnomah County  pass-
Late Filing Penalty 
                                                                           through income adjustment claimed) 
If you do not file your 2022 Form MC-40 by the original due                 
date, file an  extension with the Revenue Division by the               Required Supporting Federal Tax Pages 
original due date, or include a copy of your federal extension           
with your return when you file by the extended due date, the            Be sure to include the following federal tax pages and any 
following penalties will be applied:                                    associated statements when submitting your return: 
                                                                         • Federal Form 1040, pages 1-2   
   •         5% of the amount of the unpaid tax if the failure to        • Federal Schedule 1 
             file is for a period less than four months.                 • Schedule B (if filed)  
   •         An additional penalty of 100% of the unpaid tax of          • Schedule C (if filed) 
             all tax years if the failure to file is for three or more   • Schedule D  (if filed, including Form 4797, Form 
             consecutive tax years.                                        6252, and Form 8824))  
                                                                         • Schedule E (if filed) 
No late filing penalty is due if a timely extension is filed with        • Schedule F (if filed) 
the Revenue Division and a 2022 Form MC-40 is filed by                   • Form 4868 (if federal extension filed)  
the extended due date, or a copy of the federal extension is             • Form(s)  W-2  (if  Multnomah  County  PFA  tax 
included with the return and the ‘Extension Filed’ box is                  withheld) 
checked.                                                                 • Form  1099-R  (if  PERS  or  federal  retirement 
                                                                           exemption claimed) 
Late Payment Penalty                                                     • Schedule(s) K-1 (Form 1065/Form 1120-S/Form 
 
                                                                           1041) (if Multnomah County pass-through income 
Your 2022 income tax must be paid by April 18, 2023, even                  adjustment claimed) 
if you requested an extension to file your  personal tax                 • Form 8582 if passive activity loss limitations apply 
return. If you do not pay your tax by the original due date, 
                                                                           to Multnomah County pass-through loss adjustment 
the following penalties will be applied: 
   •         5% of the amount of the unpaid tax if the failure to       Required Multnomah County Business 
             pay is for a period less than four months.                 Tax Pages 
   •         An additional penalty of 100% of the unpaid tax of          
             all tax years if the failure to pay is for three or more    • FORM SP-2022  Combined Tax  Return for 
             consecutive tax years.                                        Individuals – Multnomah County Business Income 
                                                                           Tax/City of Portland Business License Tax (if 
                                                                           Multnomah          County  pass-through     income
                                                                           adjustment         claimed for sole-proprietor  or
                                                                           disregarded entity business income) 

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                                                                 residential address has changed, list the current address 
Tax Return Filing Instructions 
                                                                 and mark the “check if changed” box.  Unless a mailing 
Rounding. Round off cents to whole dollars on your return        address is provided, correspondence will be sent  to the 
and schedules. To round, drop amounts under 50 cents and         residence address on file. 
increase amounts from 50 to 99 cents to the next dollar. For 
example, $1.39 becomes $1 and $2.50 becomes $3. If two           Mailing Address. Only  enter an address if the mailing 
or more amounts must be added to figure the amount to            address is different from the residential address. If the 
enter on a line, include cents when adding the amounts and       mailing address has changed, list the current address and 
round      off only the total.                                   mark the “check if changed” box. 

                                                                 Initial Return Box. Check this box if this is your  initial 
General Return Information 
                                                                 return, if your filing status changed from the previous year, 
                                                                 or if the person you are filing jointly with changed from the 
Multnomah County Preschool for All Personal Income               previous year. 
Tax Account #. If you have already registered for an 
account and know  your  account number, enter  your full         Final Return Box. Check this box if this is your final return.  
Multnomah County  PFA  Tax Account number beginning 
with MCP followed by ten digits. If you do not know your         Amended Return Box. Check this box if you are filing an 
number, leave field blank.                                       amended  return and have already submitted an original 
                                                                 return. You must include a copy of your original return with 
Filing Status. Check the box next to your filing status. You     your amended return. If you also filed amended federal and 
must use the filing status corresponding with the filing status  state returns, please include a copy. Fill in all amounts on 
used on your Oregon tax return.  Choose only one filing          your amended return, even if they are the same as originally 
status.                                                          filed. If you are amending to make a change to additions, 
                                                                 subtractions, or credits, include detail of all items and 
Taxpayer’s Last Name; First Name and  Initial. If filing         amounts as well as any carryovers. 
jointly, enter the last name, first name, and middle initial (if 
applicable) of the taxpayer listed as the primary filer on the   If you change taxable income by filing an amended federal 
Form OR-40. If taxpayer died during the tax year, check the      or Oregon income tax return, you must file an amended 
“deceased” box. A personal income tax return must be filed       Form MC-40 within 60 days of when the amended federal 
for a person who  died if the person  would  have been           or Oregon income tax return was filed. Include a copy of 
required to file. If you have been appointed personal            your amended federal or Oregon income tax return and 
representative or you have filed a small estate affidavit, sign  explain the adjustments made. 
the return as “personal representative.” A surviving spouse 
must  sign if it’s a joint  return. If there is no personal      On the prepayments line of your amended  Form MC-40, 
representative for the deceased person, only the surviving       enter the net tax as reflected on the original return or as 
spouse needs to sign a joint return.                             previously adjusted. Do not include any penalty or interest 
                                                                 portions of payments already made.  
Spouse’s  Last Name; First  Name and  Initial. If filing 
jointly or as married filing separately, enter the last name,    Extension Filed Box. Check this box If you have filed a 
first name, and middle initial (if applicable) of the individual federal or state extension, or if you submitted an extension 
listed as the spouse on Form OR-40. If taxpayer died during      payment by  the original  due date of  the return. Include 
the tax year, check the “deceased” box. A personal income        required copies of federal or state extensions as applicable 
tax return must be filed for a person who died if the person     (see “Extensions” under “General Information” for additional 
would have been  required  to  file.  If you have been           information).  
appointed personal representative or you have filed a small 
estate affidavit, sign the return as “personal representative.”  Part I – Multnomah County Taxable 
A surviving spouse must sign if it’s a joint return. If there is Income 
                                                                  
no personal representative for the deceased person, only 
the surviving spouse needs to sign a joint return.               Line 1. Oregon Taxable Income. Enter  your Oregon 
                                                                 Taxable Income from Form OR-40, line 19. You must attach 
Social Security Number. Enter the Social Security Number         copies of the required Oregon and federal tax forms listed 
(SSN) or Individual Tax Identification Number (ITIN) of the      in the instructions to your Multnomah County return. 
corresponding taxpayer and spouse. Refunds will not be 
issued without a valid SSN or ITIN.                              Line  2.  Exempt  Income.  Oregon  Public  Employees 
                                                                 Retirement (PERS) benefits and federal retirement benefits, 
Residence Address. Enter the residential address. If the         including Federal Employees Retirement System (FERS) 
primary taxpayer and spouse have different residential           benefits, Civil Service Retirement System (CSRS) benefits, 
addresses, list the address of the primary taxpayer. If the      and military retirement benefits, that are taxed by Oregon 

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are exempt from this tax. Submit a copy of Form 1099-R for state does not allow the credit. This credit can only be taken
each source claimed. You are only allowed a deduction for if the filer claims a credit for income taxes paid to another
income that was not already exempted on your federal or state on the filer’s Oregon income tax return or if a
Oregon return. Enter as a negative number. composite return was filed and there was no credit allowed
on the other state’s return. A Multnomah County resident
Line 3. Pass-through Income Modification. If you figures the credit as the lesser of the Multnomah County tax
received a Schedule K-1 (Form 1065) or a Schedule K-1
based on mutually taxed income or the tax actually paid to
(Form 1120-S) from a pass-through entity (PTE) that was
the other state. To calculate the Multnomah County tax
subject to the Multnomah County Business Income Tax
(MCBIT), or if you have business income on your personal based on mutually taxed income, use the following formula:
income tax return that was subject to the MCBIT, complete Mutually taxed income
Schedule PTI on page 2 and report your modification from ÷
line B-2 on line 3. Net pass-through gains will be reported Multnomah County income subject to tax from line 5
on this line as a negative value, and a net operating loss x
Multnomah County Tax
deduction will be reported on this line as a positive value. =
See instructions for Schedule PTI for additional guidance. Multnomah County tax based on mutually taxed income

Line 4. Multnomah County Income Exemption. If you use Enter the lesser of the Multnomah County tax based on
the single filing status of single or married filing separately, mutually taxed income or the tax actually paid to the other
enter $125,000 on line 4. If you use the joint filing status of state on line 9. Enter as a negative number.
married filing jointly, head of household, or qualifying
Line 10. Employer Withholding. If you had Multnomah
surviving spouse, enter $200,000 on line 4. Enter as a
County PFA tax withheld from your wages by your
negative number.
employer, complete Schedule WH on page 2 and enter the
Line 5. Income Subject to Tax. Enter the sum of lines 1 total tax withheld from line A-2 on line 8 as a negative
through 4 on line 5. If the balance is less than $0, enter $0. number. If you have tax to pay, consider submitting a FORM
If you have $0 income subject to tax, you are not required OPT to your employer to increase the amount your
to file, but may choose to do so if you have had tax withheld employer holds from your wages. For withholding
or made prepayments and you wish to request a refund. information, go to: www.multco.us/finance/preschool-all-
personal-income-tax.
Line 5a. Tier 1 Taxable Income. Enter the balance of line
5. This is the total amount of income that exceeds the Line 11. Prepayments. Enter the total amount of
Multnomah County income exemption. prepayments as a negative number. Include all quarterly
estimated payments, extension payments, and any credits
Line 5b. Tier 2 Taxable Income. Enter the balance of line carried forward from prior years.
5 minus $125,000 if filing single or married filing separately,
or line 5 minus $200,000 if filing married filing jointly, head Line 12. Penalty. Enter all late penalties that apply, if
of household, or qualifying widower, on line 5b. This is the known. Leave blank if unknown or not applicable. If
total amount of income that exceeds $250,000 if filing as additional penalty is owed but was not calculated at the time
single or married filing separately and $400,000 if filing as of return submission, you will receive a bill by mail.
married filing jointly, head of household, or qualifying
Line 13. Interest. Enter interest due on tax not paid by the
widower.
due date, if known. Leave blank if unknown or not
applicable. If additional interest is owed but was not
Part II – Multnomah County Preschool for calculated at the time of return submission, you will receive
All Tax a bill by mail.

Line 6. Tier 1 Tax. Multiply line 5a by 1.5% and enter on Line 14. Balance Due or (Overpayment). Add lines 8
line 6. through 13 and enter sum on line 14. If sum is positive, you
have a balance due. If sum is negative, you have an
Line 7. Tier 2 Tax. Multiply line 5b by 1.5% and enter on overpayment for the year.
line 7.
Part III – Tax Due / Refund
Line 8. Total Tax. Add line 6 and line 7 and enter on line 8.
This is your total Multnomah County personal income tax
liability. Line 15. Overpayment. If line 14 is negative, this is the
amount you have overpaid. If you have an overpayment,
Line 9. Credit for Taxes Paid to Another State. A you may choose to have the balance refunded to you or
Multnomah County resident is allowed a credit for taxes credited forward to the next year. If no election is made, any
paid to another state on mutually taxed income if the other overpayment will be refunded to you.

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Line 15a. Refund. Enter the amount of the overpayment PFA tax, information regarding the withholding will be
you would like refunded to you on this line. If you would like shown in boxes 18, 19, and 20 of your W-2. Round off cents
direct deposit of your refund, you must file your return online to whole dollars. If you have to add two or more amounts to
at Pro.Portland.gov. If your return is filed on paper, you will figure the amount to enter on a line, include cents when
receive your refund in the mail by check. adding the amounts and round off only the total. If you file a
joint Multnomah County tax return, include information for
Line 15b. Credit Carryforward. Enter the amount of the both the primary filer and spouse on Schedule WH.
overpayment you would like to apply as an estimated
payment for tax year 2023 on this line. This election is Only include box 18 and box 19 information if the locality in
irrevocable. box 20 says “MULT”, “MultCo”, or “Multnomah County”. Do
not include information for the locality of “Metro” or “Metro
Line 16. Amount Due. If line 14 is positive, a balance is SHS”. Information for Metro withholdings will be reported on
due. Pay by April 18, 2023, to avoid late payment penalties the Metro Personal Income Tax return, which is a separate
and interest. You may pay by check or online at form. If no Multnomah County PFA tax was withheld on your
Pro.Portland.gov. behalf (or your spouse’s behalf, if filing jointly) by your
employer(s), you do not need to complete this schedule.

Part IV – Signature Report each W-2 on a separate line. Round off cents to

whole dollars. If two or more amounts must be added to
Signature(s). Be sure to sign and date your return. If you figure the amount to enter on a line, include cents when
are filing a joint return, both taxpayers must sign. By signing adding the amounts and round off only the total.
the return, you acknowledge, under penalty of false
swearing, that the information on the return is true, correct, Column (a). Employee SSN. Enter the social security
and complete. number of the filer shown in box a of the W-2.

Preparer Signature. Anyone who prepares, advises, or Column (b). Employer Name. Enter the name of the
assists in preparing personal income tax returns in employer shown in box c of the W-2.
exchange for compensation of any kind must be licensed to
Column (c). Employer FEIN. Enter the employer
prepare Oregon returns and must sign the return.
identification number (EIN) shown in box b of the W-2.

Mailing Instructions Column (d). Local Wages, Tips, Etc. Enter the amount

shown in box 18 of the W-2. Make sure that the locality
If you are including a payment with your return, send your name shown in box 20 indicates that the value in box 18 is
completed return, payment, and all required supporting tax for the Multnomah County PFA tax.
pages to:
Column (e). Local Income Tax Withheld. Enter the
Revenue Division – Multnomah County PFA Tax amount shown in box 19 of the W-2. Make sure that the
PO Box 9250 locality name shown in box 20 indicates that the value in
Portland, OR 97207-9250 box 19 is for the Multnomah County PFA tax.

Make the check payable to ‘Multnomah County PFA Tax.’ Check box if you have additional employer
For fastest payment processing, pay online by logging into withholdings, and submit statement. If you have more
your PRO account at Pro.Portland.gov. than four W-2s that show Multnomah County Tax
withholdings, check the box, and attach a statement with the
If a payment is not included with your return, send your employee SSN, employer name, employer FEIN, local
completed return and all required supporting tax pages to: wages, tips, etc. and local income tax withheld for each
additional W-2. Include the total amount from the statement
Processing – Multnomah County PFA Tax on line A-2.
111 SW Columbia St, Suite 600 Line A-2. Total sum from column (e). Enter sum of all
Portland, OR 97201-5840 Multnomah County Tax withheld from column (e) and the
supplemental statement (if applicable). Enter the amount
from line A-2 on line 10, page 1 of the return.
Schedule WH – W-2 Withholding Summary
for Multnomah County PFA Tax

Use this schedule to calculate the total amount of
Multnomah County PFA tax that was withheld by your
employer. If your employer withheld the Multnomah County

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be required. Submit a copy of the corresponding Schedule
Schedule PTI – Pass-Through Income
K-1 or SP-2022 for each modification claimed.
Modification

Column (a). Tax ID of Pass-Through Entity. Enter the S
Use this schedule to determine the amount of pass-through corporation or partnership employer identification number
income modification to report for pass-through income/loss from box A of the Schedule K-1 or the social security
that was already subject to the Multnomah County Business number of the sole proprietor who was liable for the MCBIT
Income Tax (MCBIT). This schedule must be completed to on business income tax reported on the personal income
determine the value for line 3 in Part I of the return. If your tax return.
pass-through income was not subject to tax under the
MCBIT for any reason, you are not eligible to claim a pass- Column (b). Name of Pass-Through Entity. Enter the
through income modification. name of the S corporation or partnership from box B of the
Schedule K-1 or the name of the sole proprietor.

Income from Pass-Through Entity Subject
Column (c). Income Subject to Tax from Pass-Through
to MCBIT Entity. For the deduction for pass-through income from a
PTE’s income subject to tax, enter Multnomah County
You are allowed a deduction from personal taxable income “income subject to tax” from the S corporation or partnership
for pass-through income derived from a pass-through entity return that was reported to you by the PTE with Schedule
(PTE) subject to the MCBIT. To take this deduction, you K-1 or that is reported on line 20 of Form SP-2022
must have documentation from the PTE showing your share (Combined Tax Return for Individuals – Multnomah County
of income that was subject to tax on the business’s MCBIT Business Income Tax/City of Portland Business License
return. PTEs subject to the MCBIT who file on a return other Tax).
than the SP-2022 must provide their owners or partners
information along with Schedule K-1 that indicates: 1) For net operating loss deductions (NOLD) that must be
whether the business is subject to the MCBIT; 2) that the added back, enter the amount of net operating loss
business filed the MCBIT return for the tax year of the deduction allowed on your federal return from a pass-
Schedule K-1; and 3) the PTE’s Multnomah County “income through entity or sole proprietor subject to the MCBIT. Enter
subject to tax” reported on the MCBIT return. Your a loss as a negative number.
deduction should be the amount of your distributive share
of the PTE’s income subject to tax reported to you with Column (d). Ownership Percentage. Enter your
Schedule K-1 or as filed on Form SP-2022. The deduction ownership percentage in the PTE. For an NOLD that must
is limited to the amount of pass-through income, from the be added back, enter 100% as 1.000000.
entity that paid the MCBIT, that is included in your federal
Form 1040. Column (e). Modification Claimed for Pass-Through
Income. For the deduction for pass-through income from a
Losses from Pass-Through Entity Subject PTE’s income subject to tax, multiply column (c) by column
to MCBIT (d) and enter the result. Enter deductions for income from a
PTE’s income subject to tax as a positive number. Enter
Net operating losses generated in the current tax year at the losses as a negative number.
PTE level are allowed to be claimed at the individual level
to the extent that the loss is allowed on the federal and Check box for additional pass-through income
Oregon return. A pass-through loss cannot exceed the modifications and statement. If you have pass-through
amount of pass-through loss included in Oregon taxable income/loss from more than five PTEs to deduct or add-
income and cannot reduce your Multnomah County taxable back, check the box, and attach a statement which includes
income to an amount below zero. the following information for each additional PTE: the tax ID
of the PTE; the name of the PTE; of the PTE’s “income
If you claimed a net operating loss deduction on your federal subject to tax” reported on the MCBIT return or your
Form 1040 that was from a carryforward of a net operating required add-back of loss incurred by the PTE; and the total
loss from a PTE that was subject to the MCBIT in a prior modification claimed related to the PTE. Include the total
year, the deduction is disallowed for purposes of the amount of additional modifications from the statement on
Multnomah County PFA Personal Income Tax and must be line B-2.
added back to your Multnomah County taxable income as a
pass-through modification. Include a statement explaining Line B-2. Total sum from column (e). Enter sum of all
the adjustment. eligible pass-through income/loss from column (e) and the
supplemental statement (if applicable). Enter the amount
Report each PTE on a separate line. If income or loss flows from line B-2 on line 3, Part I of the return. If you have a net
through one or more pass-through entities between the loss, enter this as a positive number on line 3. If you have a
entity that paid tax and your federal return, adjustments may net gain, enter this as a negative number on
line 3.

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