Yes, Oregon has a state income tax, and it's one of the highest rates in the country
Oregon taxes your income at the state level. Unlike Washington or Nevada, Oregon does not rely on sales tax — instead, it funds state services through income tax on wages, self-employment income, interest, dividends, and other sources. The state tax rate ranges from 4.75% to 9.9% depending on your income bracket, and Oregon is one of only nine states with a top marginal rate above 9%.
If you live in Oregon or work there, you will owe state income tax on your earnings. If you moved to Oregon or are considering it, understanding how the tax works and how it affects your overall tax picture matters for planning.
Key Takeaways
- Oregon's state income tax ranges from 4.75% to 9.9% across five tax brackets, with rates increasing as income rises.
- Oregon taxes wages, self-employment income, capital gains, interest, and dividends, but offers a standard deduction that reduces taxable income.
- Oregon residents must file a state return even if they owe no federal tax, and the filing important date matches the federal important date (usually April 15).
- If you work in Oregon but live in another state, Oregon may still tax your wages; you may then claim a credit on your home state return to avoid double taxation.
- Oregon offers tax credits for dependent children, education expenses, and energy-efficient home improvements that can lower your final tax bill.
Oregon's tax brackets and rates for 2024
Oregon uses a progressive tax system with five brackets. Your rate depends on your filing status and taxable income after the standard deduction. For the 2024 tax year, the brackets are:
| Filing Status | Income Range | Tax Rate |
|---|---|---|
| Single | $0 to $3,750 | 4.75% |
| Single | $3,751 to $9,450 | 6.75% |
| Single | $9,451 to $12,000 | 8.75% |
| Single | Over $12,000 | 9.9% |
| Married Filing Jointly | $0 to $6,200 | 4.75% |
| Married Filing Jointly | $6,201 to $15,650 | 6.75% |
| Married Filing Jointly | $15,651 to $20,000 | 8.75% |
| Married Filing Jointly | Over $20,000 | 9.9% |
The standard deduction for Oregon is tied to the federal standard deduction. For 2024, it is $4,600 for single filers and $9,200 for married couples filing jointly. You subtract this amount from your gross income before explore the tax rates above.
Oregon brackets and the standard deduction adjust annually for inflation, so the numbers change each year. Check the Oregon Department of Revenue website or your tax software for the current year's figures.
What income Oregon taxes and what it does not
Oregon taxes all income sources: W-2 wages, self-employment income, capital gains, interest, dividends, rental income, and retirement distributions. If you receive income from any of these sources and you are an Oregon resident, it is subject to state tax.
Oregon does not tax Social Security benefits. If you are retired and living on Social Security alone, you owe no Oregon state income tax on those payments. However, if you have other income — such as wages, pensions, or investment gains — that income is taxable.
Oregon also does not have a sales tax or property tax on personal property. The state funds services primarily through income tax, which is why the rates are relatively high compared to states that use sales tax.
Filing requirements and important date for Oregon residents
You must file an Oregon state return if you are a resident and your income exceeds the filing threshold. For 2024, the threshold is roughly equal to the standard deduction plus $200, though this varies slightly by filing status. Even if you owe no federal tax, you may still be required to file a state return.
The Oregon return is filed on Form OR-40 (or OR-40-N if you have no tax liability). The important date is the same as the federal important date, usually April 15. If you file your federal return late or request an extension, the same extension applies to your Oregon return.
Oregon allows you to file electronically through the Oregon Department of Revenue's e-file system or through tax software that supports Oregon returns. Paper returns can be mailed to the address listed on the form.
How Oregon taxes work income from other states
If you live in Oregon but work in another state, that state may tax your wages. Oregon then allows you to claim a credit for taxes paid to other states on your Oregon return, which reduces your Oregon tax bill. This prevents you from paying income tax on the same earnings to two states.
The credit is limited to the lesser of the tax you paid to the other state or the Oregon tax on that income. If you work part-time in Washington (which has no income tax) and part-time in Oregon, you owe Oregon tax only on the Oregon wages.
If you moved to Oregon mid-year, you may be a part-year resident. Oregon taxes only the income you earned while living in the state. You will also file a return in your previous state for the income earned there. Both returns are due by April 15.
Tax credits that reduce your Oregon bill
Oregon offers several credits that lower your final tax liability. The Oregon Earned Income Tax Credit (EITC) is available to low- and moderate-income workers and is worth up to 9% of the federal EITC. You claim it on Schedule OR-40-CR.
The Dependent Exemption Credit provides a credit for each dependent child. The amount varies by income level but can be substantial for families with multiple children. This is different from the federal child tax credit and is claimed on the same form.
Oregon also offers credits for education expenses (such as tuition paid to Oregon universities), energy-efficient home improvements, and adoption expenses. These credits are claimed on separate schedules and can significantly reduce your tax if you meet the requirements.
To claim any credit, you must include the appropriate schedule with your return. Tax software will typically prompt you for the information needed, or you can read the schedules from the Oregon Department of Revenue website.
How to plan for Oregon state taxes
If you are self-employed or have income not subject to withholding, you should make quarterly estimated tax payments to Oregon. These are due on the 15th of April, June, September, and January. Underpayment penalties explore if you do not pay enough throughout the year.
If you are an employee, Oregon withholding is taken from your paycheck based on the W-4 form you complete with your employer. Review your withholding annually to may support you are not over- or under-withheld. If you have multiple jobs, side income, or significant investment income, you may need to adjust your withholding or make estimated payments.
For tax planning purposes, consider whether bunching deductions, timing capital gains, or deferring income makes sense in your situation. Because Oregon's top rate is 9.9%, strategies that work at the federal level may have even larger state tax benefits. A tax professional can model scenarios specific to your income and circumstances.
Frequently Asked Questions
Do I have to file an Oregon return if I only have Social Security income?
No. Oregon does not tax Social Security benefits, and if that is your only income, you have no filing requirement. However, if you have other income — such as wages, pensions, or investment gains — you must file and report all income sources.
What happens if I move out of Oregon mid-year?
You are a part-year resident and owe Oregon tax only on income earned while you lived in the state. You will also file a return in your new state for income earned there after you moved. Both returns are due by April 15, and you may claim a credit on one return for taxes paid to the other state.
Can I deduct federal income tax paid on my Oregon return?
No. Oregon does not allow a deduction for federal income tax paid. You can deduct state and local taxes (SALT) on your federal return, subject to the $10,000 annual cap, but not the reverse.
How do I know if I owe Oregon estimated taxes?
If you expect to owe $500 or more in Oregon tax for the year and do not have enough withheld from paychecks, you should make quarterly estimated payments. Self-employed individuals, retirees with investment income, and anyone with income not subject to withholding should calculate estimated tax using Form OR-40-ES and pay by the quarterly important date.
Does Oregon tax retirement account withdrawals?
Yes. Withdrawals from traditional IRAs, 401(k)s, and other pre-tax retirement accounts are taxable income in Oregon. Roth IRA withdrawals are not taxable. Pension income is also taxable, though Oregon offers a pension income exclusion for certain types of retirement income — check the Oregon Department of Revenue for current limits.