SALEM The checks are almost in the mail.

In December, Oregon taxpayers will open their mailboxes and find government checks that represent their cut of a record-setting tax rebate.

Its the first refund since 2001 under the states unique kicker law and its a doozy, adding up to almost $1.1 billion.

The checks will vary depending how much taxes were paid, but the median taxpayer will get about $297 back.

The Department of Revenue will start printing checks Nov. 27, said communications manager Linda West.

The deadline for them to be mailed is Dec. 15, just in time for some last-minute gift shopping or depending on the size of your check a really big ham.

The checks represent the money that poured unexpectedly into the treasury during the 2005-07 budget cycle, which ended June 30.

The kicker law is a spending cap that prevents government from keeping dollars that arent anticipated. If tax collections exceed economists projections by 2 percent or more, the law kicks in and the unbudgeted money is returned.

If tax receipts dont exceed that threshold, there is no rebate.

The state will send out roughly 1.6 million envelopes, and the cost of processing and mailing will be about $1 million.

Although theyre mostly checks, were also mailing out notices for those whose refund was offset against money they owed, West said.

The kicker was first passed by voters in 1979 and is the only law of its kind in the nation. It remains a source of contention.

However, regular arguments about whether the kicker should be returned or retained by the state have gone largely by the wayside since 2000, when voters wrote the tax rebate law into the constitution in a successful ballot measure written by former Bend legislator Tim Knopp.

It is possible for taxpayers to automatically donate their checks to schools, other government entities or to charities and expect to see campaigns advocating them to do so ramping up in the coming weeks.

At the same time, the state is warning people to be wary of scam artists who will try to get your refund or offer to set up direct deposits of kicker checks to your bank. Direct deposit is not an option with kicker checks, and those offers are phishing schemes by people trying to obtain bank account information .

The newest debate among some at the Capitol is about whether the state should save money by returning to the initial setup, when the kicker was a subtraction from taxpayer returns the following year instead of by check.

The state estimates that it will cost about $1 million to print and send the checks this year.

In addition, by keeping the money in the treasury for longer because taxes arent filed until the following April the state could earn more interest and also could avoid short-term borrowing to pay bills, said Paul Warner, director of the nonprofit Legislative Revenue Office.

The state runs into cash flow concerns in the fall because more money is going out than coming in, he said.

The kicker just exacerbates it, said Kate Richardson, chief of staff for Treasurer Randall Edwards. Thats a lot of cash going out the door at once.

Corporate taxpayers still get their kicker refunds as a credit on their tax returns. There will be no corporate refunds this year, however, because the 2007 Legislature canceled that part of the rebate and used the money roughly $300 million to create a new rainy day fund.

Oregon State University political science chairman Bill Lunch said a move to return the personal kicker to a refund on tax returns comes mostly from people who dont like the law.

If you have it in the form of a credit, it is not as obvious, and that makes it marginally easier to dink around with it, he said.

This years two-week delay in the check mailing date was granted by lawmakers as part of a new law that rejiggered the kicker formula.

Now, the law is based on the taxes due before tax credits are subtracted a change that was pursued by companies and individuals who qualify for significant tax reductions such as business energy tax credits and agricultural and forest-related credits.

And as a result, many people who end up owing no taxes, including low-income residents who qualify for the Earned Income Tax Credit, will get kicker checks for the first time this year.

This increased the number of people who are eligible, so there are more pieces of mail, and it required significant system changes, said West of the Department of Revenue.

But theres a silver lining behind that cloud: The state will be able to recoup the mailing costs with that two-week delay.

Based on a roughly 5 percent yield on dollars in the states short-term fund, that two week extra float on $1.1 billion could allow the state to collect roughly $2 million in interest, Richardson said.

How to calculate your kicker

Oregon individual income tax payers will share a record $1.071 billion tax refund under the states one-of-a-kind kicker law. Checks must be mailed by Dec. 15.

This years rebate was triggered because the state collected more money than initially projected for the 2005-07 budget cycle, which ended on June 30.

The rebate will pencil out to about 18.6 percent of the taxes people owed for the 2006 tax year, before any credits such as child support, energy-related investments or donations to the Oregon Cultural Trust – were applied.

To calculate how much your kicker will be, check your Oregon tax return at these lines:

Form 40, line 29

Form 40S, line 13

Form 40N, line 51

Form 40P, line 50.

Multiply that amount by 0.1860.

Also, the Oregon Department of Revenue has created an online calculator to determine your refund. You can access it at www.oregon.gov/DOR/pertax/kicker.shtml

For most taxpayers, Oregons income tax rate is 9 percent. That means youd owe $9 in taxes for every $100 in income.

How much are you due?

You owed $800 in total taxes: Youll get $148.80.

You owed $200 in total taxes, but actually paid nothing because of the low-income Earned Income Tax Credit. Youll get $37.20.

You owed $3,250 in total taxes, but your net taxes were less because of the Child and Dependent Care tax credit and because you bought a high-efficiency appliance. Youll get $604.50.

You owed $12,000 in total taxes: Youll get $2,232.

You have a limited liability corporation, which pays taxes through your individual return, and you owed $27,000 in taxes. You also qualified for tax credits for political contributions and because you paid income taxes in a different state. Youll get $5,022.

You are a farmer and owed $6,000, but reduced that liability with a variety of agricultural tax credits including investments in farmworker housing, farm machinery and for donating some crops. Youll get $1,116.

You owed $275,000 in total taxes: Youll get $51,150.

What is the kicker?

Q: What is the kicker?

A: It is Oregons unique tax rebate law, which provides for refunds if state tax receipts exceed economists projections, assuming the difference is 2 percent or more.

Q: How much will I get?

A: The average refund will be about $612, but the typical taxpayer will receive approximately $297.

Q: Why is the kicker so big?

A: State economists did not anticipate the level of robust growth in the Oregon economy from 2005 to 2007 when they filed their revenue estimate in 2005.

Q: When was the last kicker refund?

A: In 2001.

Q: When will my check arrive?

A: The state must mail them by Dec. 15.

Q: How are the refunds calculated?

A: Kickers are computed as a percentage of the taxes you owed. In this case, the checks will be worth 18.6 percent of what you owed in 2006.

Q: Why do wealthy people get bigger kicker checks?

A: They paid more in income taxes.

Q: Is my refund taxable?

A: Yes. The kicker is money that you dont have to pay state income taxes on – but you will still have more income for federal income tax calculations. The Oregon Center for Public policy says Oregonians will pay about $214 million more in federal taxes because of the kicker rebate.

Q: What if I paid no taxes? Will I still get a rebate check?

A: Possibly. For the first time this year, the kicker is being computed based on the taxes you owe before any subtractions due to tax credits, such as the Earned Income Tax Credit, which can sometimes reduce your tax bill to zero.

Q: Could the state retain my kicker?

A: Yes. The state will keep the money if you have a state debt, such as back taxes due, or outstanding child support or court fines. Also, taxpayers who elected on their 2006 tax returns to donate their kicker to schools will not receive checks.

Q: Isnt the kicker going to a rainy day fund?

A: The 2007 Legislature steered only the corporate share of the kicker to a rainy day fund, which added up to about $300 million. That does not affect the kickers sent to individual taxpayers