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Topics:    Rates and Structure     Business/Estate/Trusts      Extensions        Penalty and Interest

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Oklahoma Individual Income Tax General Information
Oklahoma resident individual(s) are required to file an Oklahoma income tax return when they have sufficient income to file a Federal income tax return. Nonresidents are required to file an Oklahoma income tax return when they receive gross income of at least $1,000 of Oklahoma source income.

Oklahoma tax rates are the same for residents, part-year residents, and nonresidents. The tax is computed under two methods, then the taxpayer may use the lower of the two methods as the final tax. The rates are as follows:

For Single Taxpayer and for Husband and Wife Filing Separate Returns:
Method One:  Taxable Income Before Federal Tax Deduction
If taxable income is:

0 up to 1,000 Pay 1/2 of 1% of Taxable Income
1,000 up to 2,500 Pay 5.00 plus 1% over 1,000
2,500 up to 3,750 Pay 20.00 plus 2% over 2,500
3,750 up to 4,900 Pay 45.00 plus 3% over 3,750
4,900 up to 6,200 Pay 79.50 plus 4% over 4,900
6,200 up to 7,700 Pay 131.50 plus 5% over 6,200
7,700 up to 10,000 Pay 206.50 plus 6% over 7,700
10,000 and over Pay 344.50 plus 6.65% over 10,000 (Tax Year 2004)

 

Method Two:  Taxable Income After Federal Tax Deduction
If taxable income is:

0 up to 1,000 Pay 1/2 of 1% of Taxable Income
1,000 up to 2,500 Pay 5.00 plus 1% over 1,000
2,500 up to 3,750 Pay 20.00 plus 2% over 2,500
3,750 up to 4,900 Pay 45.00 plus 3% over 3,750
4,900 up to 6,100 Pay 79.50 plus 4% over 4,900
6,100 up to 7,500 Pay 127.50 plus 5% over 6,100
7,500 up to 9,000 Pay 197.50 plus 6% over 7,500
9,000 up to 10,500 Pay 287.50 plus 7% over 9,000
10,500 up to 12,500 Pay 392.50 plus 8% over 10,500
12,500 up to 16,000 Pay 552.50 plus 9% over 12,500
16,000 and over Pay 867.50 plus 10% over 16,000



For Husband and Wife Filing Joint, Qualifying Widow(er) with Dependent Child, and Head of Household:
Method One:  Taxable Income Before Federal Tax Deduction
If taxable income is:

0 up to 2,000 Pay 1/2 of 1% of Taxable Income
2,000 up to 5,000 Pay 10.00 plus 1% over 2,000
5,000 up to 7,500 Pay 40.00 plus 2% over 5,000
7,500 up to 9,800 Pay 90.00 plus 3% over 7,500
9,800 up to 12,200 Pay 159.00 plus 4% over 9,800
12,200 up to 15,000 Pay 255.00 plus 5% over 12,200
15,000 up to 21,000 Pay 395.00 plus 6% over 15,000
21,000 and over Pay 755.00 plus 6.65% over 21,000 (Tax Year 2004)


Method Two:  Taxable Income After Federal Tax Deduction
If taxable income is:

0 up to 2,000 Pay 1/2 of 1% of Taxable Income
2,000 up to 5,000 Pay 10.00 plus 1% over 2,000
5,000 up to 7,500 Pay 40.00 plus 2% over 5,000
7,500 up to 8,900 Pay 90.00 plus 3% over 7,500
8,900 up to 10,400 Pay 132.00 plus 4% over 8,900
10,400 up to 12,000 Pay 192.00 plus 5% over 10,400
12,000 up to 13,250 Pay 272.00 plus 6% over 12,000
13,250 up to 15,000 Pay 347.00 plus 7% over 13,250
15,000 up to 18,000 Pay 469.50 plus 8% over 15,000
18,000 up to 24,000 Pay 709.50 plus 9% over 18,000
24,000 and over Pay 1249.50 plus 10% over 24,000



Personal and dependent exemptions, as defined by Internal Revenue Service, are allowed (deduction of $1,000 per exemption). An additional exemption of $1,000 may be allowed for taxpayer or spouse who is blind at the close of the tax year.

After December 31, 1987, there is allowed an additional exemption of $1,000 for each taxpayer or spouse who is sixty-five (65) years of age or older at the close of the tax year AND has met qualifications based on their filing status and federal adjusted gross income (Federal AGI). Taxpayers with the following filing status may claim this exemption if the Federal AGI does not exceed:

$25,000 Married and Filing Jointly
$12,500 Married and Filing Separately
$15,000 Single
$19,000 Qualifying Head of Household


Oklahoma's standard deduction is 15 percent of the Oklahoma adjusted gross income (Oklahoma AGI), but not less than $1,000 nor greater than $2,000, for all taxpayers except married taxpayers filing separately. For married filing separately, the standard deduction is 15 percent of the Oklahoma AGI, but not less than $500 nor greater than $1,000.

Oklahoma itemized deductions are the same as currently defined in the IRS code. The basic rule is if you itemized on your Oklahoma return, you must have itemized on your Federal return.

In the case of resident individuals having income from sources both within and without the State of Oklahoma, the standard or itemized deductions and personal exemptions will be reduced to an amount which is the same portion of the total of Oklahoma AGI to Federal AGI.

Individual income tax returns are due on the 15th day of the fourth month following the close of the taxable year.



Oklahoma Business/Estate/Trust Income Tax
Filing Requirements:
Every partnership, corporation, resident estate and trust, and nonresident estate and trust with Oklahoma source income is required to file an Oklahoma income tax return.

An affiliated group of corporations can elect to file a consolidated Oklahoma return. The group's consolidated income, loss or deduction shall be determined on a component member by component member basis. If this election is made, such election shall be binding for all future tax years unless the Oklahoma Tax Commission releases the group from such election.

A corporation having an election in effect under subchapter S of the Internal Revenue Code shall not be subject to the Oklahoma income tax on corporations, and the shareholder shall include in their taxable incomes their proportionable share of the distributive income. However, if any of the shareholders are nonresidents during any part of the corporation's taxable year, the corporation shall be taxable on that part of the income allocable to the nonresident, unless the corporation files, with its return, an agreement executed by each nonresident stating that they will file a return reporting their share of the income.

Tax Rates:
Corporations are taxed at a 6 percent tax rate.

Fiduciaries have the same tax rates as single individuals under method one (1).

Due Dates:
All returns, except corporate returns, are due on the 15th day of the fourth month following the close of the taxable year.

Corporate returns are due on the 15th day of the third month following the close of the taxable year. In the case of a complete liquidation, or dissolution, of a corporation, the return is due on the 15th day of the fourth month following the month in which the corporation is completely liquidated. 



Extension of Time to File
If there is no additional state income tax due and you intend to file within the period granted by the IRS, the Oklahoma Tax Commission will honor the Federal extension. Enclose a copy of the Federal extension with your filed Oklahoma return. An Oklahoma extension form 504 is required when requesting an extension beyond that granted by the IRS, or if you need to make a payment to cover your anticipated tax liability. An extension is valid only if 90 percent of the tax due is paid on or before the original due date of the return. An Oklahoma extension is not an extension of time to pay the tax, it is only an extension of time to file the return.



Penalty and Interest Information
Delinquent Penalty and Interest:
If at least 90 percent of the tax liability is not paid by the original due date of the return, the unpaid tax becomes delinquent and a penalty of 5 percent shall be charged thereon.

If less than 100 percent of the tax liability is paid by the original due date of the return, interest on the unpaid amount is assessed, even when no delinquent penalty is assessed. The unpaid tax becomes delinquent and interest is charged at the rate of 1.25 percent per month from the date of the delinquency until paid.

Underpayment of Estimated Tax Penalty:
Estimated tax payments were required if the tax liability exceeds withholding (if applicable) by $500 or more.  To avoid the Underpayment of Estimated Tax Interest, timely filed estimated tax payments and withholding (if applicable) are required to be equal to the smaller of 70% of the current year tax liability or 100% of the prior year tax liability.

The Underpayment of Estimated Tax Interest due on any quarterly due date is computed at a rate of 20% per annum for the period of underpayment.

Note:  No Underpayment of Estimated Tax Interest will be imposed if the tax liability shown on the return is less than $1,000.

2004 Oklahoma Tax Commission. All rights reserved.
This page last modified January 7, 2005.
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