Multnomah County & Metro Taxes: What Portland High Earners Need to Know

I love living in Portland. I grew up in a mid-sized town in Minnesota that, at the time, didn’t have walkability, great food, or much of a nightlife. So when we moved to Portland in 2018, I was blown away by what an urban city life with incredible culture and community could provide! 

As our income grew, we’ve gotten to really embrace all the things Portland has to offer. Such as purchasing our first cargo e-bike to cart our kid to daycare, living in craftsman-style homes nestled in the Irvington and Alameda neighborhoods, and of course, eating endless amounts of delicious food.

However, not all of our earnings have been going towards the joys this incredible city has to offer. It also goes to federal, state, and local taxes. Today’s blog is focused on the local taxes, specifically the Multnomah County Preschool for All (PFA) Tax and Metro Supportive Housing Services (SHS) Tax. Not only do we want our locally based clients to understand these taxes, but we want to flag the big discrepancy we’ve witnessed since the passing of these taxes: employers do not withhold the right amount, which inevitably means clients get surprise tax bills come tax season. Let’s change that, shall we?

WHEN DID THESE TAXES COME INTO EFFECT?

The Metro Supportive Housing Service Personal Income Tax (SHS Tax) and the Multnomah County Preschool for All Personal Income Tax (PFA Tax) was approved by voters in 2020 and went into effect in January 2021. We’ve had this tax in place for five years as of this writing, but we’re still seeing major underwithholding and misunderstanding of this tax.

DOES MY EMPLOYER HAVE TO WITHHOLD PFA AND SHS TAXES AUTOMATICALLY?

Yes, well sorta…Let me explain. Starting in January 2022, metro employers were required to withhold these taxes through payroll deductions for those who earn more than $200k or for those who opt in.

Here’s why that can become a problem: You may start the year earning $180k, but a surprise bonus puts you closer to $220k and you hadn’t had withholding throughout the year due to your lower income threshold.

Here’s why that can become a problem #2: The tax is based on household income. The required withholding from the employer is based on their one employee and does not account for the other partner’s income. In 2026, the SHS Tax income threshold for Joint Filing status is $200,000. If both partners made $190k (below the threshold), SHS Tax may not have been withheld, and they have a total household income of $380k, significantly over the $200k threshold. Yikes!

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WHAT IS THE METRO SUPPORTIVE HOUSING SERVICE PERSONAL INCOME TAX?

The Metro Supportive Housing Service Personal Income Tax (SHS Tax) is a measure to raise money for people experiencing homelessness or at risk of experiencing homelessness, according to the portland.gov website. The services include placement into housing, help paying rent, and emergency services such as outreach and shelter. Here is a website that tracks the progress. For example, in Multnomah county, from July 1 2021 through March 31, 2026 there have been 5,556 households placed in housing.

HOW DO I KNOW IF I NEED TO PAY THIS TAX?

The SHS Tax is for those who live, work, or have income from Metro sources (even if not a resident of the Metro!) business income within the Metro’s jurisdiction. This includes 24 cities and unincorporated portions of Clackamas, Multnomah, and Washington counties. 

Here is a metro boundary address lookup to determine if you need to pay this tax.

WHAT INCOME LEVEL TRIGGERS THE METRO SUPPORTIVE HOUSING SERVICE PERSONAL INCOME TAX?

Metro taxable income over $128,000 for individuals and $205,000 for joint filers in 2026. These thresholds will be adjusted for inflation each year.

WHAT IS THE TAX RATE FOR METRO SUPPORTIVE HOUSING SERVICE PERSONAL INCOME TAX?

The SHS Tax is a 1% marginal personal income tax on Metro taxable income above $128,000 for individuals and $205,000 for joint filers in 2026. 

HOW IS MY METRO TAXABLE INCOME CALCULATED FOR THE METRO SUPPORTIVE HOUSING SERVICE PERSONAL INCOME TAX?

Metro taxable income over the thresholds will be assessed at the 1% marginal tax rate. Here’s a high-level example of that:

Household joint Metro taxable income = $532,000

- 2026 income threshold for SHS Tax = $205,000

= Income taxable for SHS tax = $327,000

1% marginal tax rate for SHS = $3,270 SHS Tax due for this household

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WHAT IS THE MULTNOMAH COUNTY PRESCHOOL FOR ALL PERSONAL INCOME TAX?

The Multnomah County Preschool For All Personal Income Tax (PFA Tax) provides three- and four-year-olds in Multnomah County with free preschool. Each year, the number of children and families grows, and in 2030 it is expected that all interested families will have access to free preschool. We hope to benefit from this program when our daughter turns 3 in 2027!

HOW DO I KNOW IF I NEED TO PAY THIS TAX?

The Multnomah County Preschool for All tax is required for those who have taxable income over the threshold and live, work, or have income from Multnomah County sources (even if not a resident in Multnomah County). To determine if your address is located in Multnomah County, type in your address using Portland Maps.

WHAT INCOME LEVEL TRIGGERS THE MULTNOMAH COUNTY PRESCHOOL FOR ALL TAX?

The PFA Tax is required to be paid on Multnomah County taxable income over $125,000 for individuals and $200,000 for joint filers.

WHAT IS THE TAX RATE FOR MULTNOMAH COUNTY PRESCHOOL FOR ALL TAX?

The PFA Tax is a 1.5% marginal personal income tax on Multnomah County taxable income above $125,000 for individuals and $200,000 for joint filers in 2026. But wait, there’s more!The PFA Tax has an additional 1.5% (for a total of 3% in this threshold) marginal personal income tax on Multnomah County taxable income above $250,000 for individuals and $400,000 for joint filers.

HOW IS MY MULTNOMAH COUNTY TAXABLE INCOME CALCULATED FOR PFA TAX?

It works similarly to the SHS Tax. Multnomah County taxable income over the thresholds will be assessed at the 1.5% (plus a possible additional 1.5%) marginal tax rate. Here’s a high-level example of that:

Household joint Multnomah County taxable income = $532,000

- 2026 income threshold for PFA Tax = $200,000

= Income taxable for PFA tax = $332,000

1.5% marginal tax rate for PFA Tax on the first $200k = $3,000 PFA Tax 

1.5% + 1.5% = 3% marginal tax rate for PFA Tax on the next $132k = $3,960 PFA Tax

Total = $6,960 in PFA taxes due for this household.

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DO I NEED TO FILE A SEPARATE RETURN FOR SHS TAX AND PFA TAX?

Yes, this requires you to file separate “personal tax returns.” This is different from your federal and Oregon returns. Here is where you would file that return.

DO I NEED TO MAKE QUARTERLY ESTIMATED PAYMENTS FOR SHS AND PFA TAX?

You may! The SHS Tax and the PFA Tax require quarterly tax payments or have appropriate employer withholdings if your tax liability for either program is $1,000 or greater and if the tax filer’s prior tax liability for the program was $1,000 or greater.

For us and our clients, we make predictions of what our income will be for the year, and have our employers update their withholding accordingly. This is much easier than making (and remembering) quarterly tax payments!

WHY TAX PLANNING IS SO IMPORTANT

At EQUAL VOICES Wealth, we believe tax planning is a year-round endeavor, not something to think about for just a few months out of the year.

Decisions like retirement contributions, charitable gifts, and stock compensation timing all impact what we're discussing here.

We don't just help tie these decisions together; we can also prepare your taxes each season. If you want your financial advisor and tax preparer under one roof to tackle these strategies together, schedule your free intro chat with us today.

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EQUAL VOICES Wealth is a fee-only, fiduciary financial planning firm with offices in Minneapolis, Minnesota and Portland, Oregon. We work with couples who have a household income of $400,000 or more, or investable assets of $1 million or more. Our services include cash flow management, retirement planning, investment management, and tax-efficient planning strategies. As a fee-only fiduciary, we are legally required to act in our clients' best interests and do not earn commissions.