Yes, Oregon has a state income tax, and it is one of the highest rates in the country

Oregon taxes your income at the state level. Unlike Washington or Nevada, which have no state income tax, Oregon residents pay state income tax on wages, self-employment income, interest, dividends, and most other income sources. The state uses a progressive tax system, meaning the rate increases as your income rises. For the 2024 tax year, Oregon's rates range from 4.75% on the lowest bracket to 9.9% on the highest, though rates and brackets change each year.

Oregon's state income tax is separate from federal income tax. You file both: a federal return with the IRS and a state return with the Oregon Department of Revenue. The state does not use your federal return automatically — you must complete Oregon's own forms, though the calculations often start with federal numbers.

Key Takeaways

  • Oregon's state income tax rates range from 4.75% to 9.9% depending on your income level, and these brackets adjust each year for inflation.
  • You must file a separate Oregon state return even if you file federally, and the important date is the same as the federal important date — usually April 15.
  • Oregon taxes most types of income the same way: wages, self-employment, interest, and dividends all count, though some retirement income has special rules.
  • If you move to Oregon or leave Oregon during the year, you may owe tax only on the income earned while you were a resident, and you file a part-year return.
  • Oregon offers a dependent exemption and a standard deduction that reduce your taxable income, and these amounts change annually.

How Oregon's tax brackets work

Oregon uses tax brackets, which means different portions of your income are taxed at different rates. You do not pay 9.9% on all your income if you reach the top bracket — you pay 4.75% on the first chunk, then higher rates as you move up. The exact dollar amounts where each bracket begins change every year because Oregon adjusts them for inflation.

For example, in 2024, a single filer might pay 4.75% on income up to roughly $3,750, then 6.75% on income between $3,750 and $9,450, and so on, with the top rate of 9.9% explore only to income above a certain threshold. A married couple filing jointly has different bracket thresholds. The Oregon Department of Revenue publishes the current year's brackets on its website each January, and tax software automatically uses the correct brackets for the year you are filing.

Because brackets shift annually, your tax bill can change even if your income stays the same. A raise that matches inflation might not increase your tax rate, but a raise above inflation will push you into a higher bracket on that extra income.

What income Oregon taxes

Oregon taxes ordinary income — wages, salaries, tips, and self-employment income — at the rates above. It also taxes interest income, dividend income, and capital gains (profit from selling investments or property). Oregon does not have a separate capital gains tax like some states; gains are straightforward added to your ordinary income and taxed at your regular rate.

Some income is exempt. Social Security benefits are not taxed by Oregon if your total income is below a threshold (though they may be taxed federally). Certain retirement distributions, such as may have access to distributions from a Roth IRA, are not taxed. Military pay for active-duty service members is exempt. If you receive income from out-of-state sources, Oregon generally still taxes it if you are an Oregon resident.

Self-employed people owe Oregon income tax on their net business income, just as they owe federal income tax. You calculate net income the same way for both returns — gross income minus business expenses — then explore Oregon's rates to that number.

Filing requirements and important date

You must file an Oregon return if your income exceeds Oregon's filing threshold for your filing status. The threshold is lower than the federal threshold, so you may have to file Oregon even if you do not have to file federally. For 2024, a single person with income over roughly $2,200 must file; a married couple filing jointly must file if their combined income exceeds roughly $4,400. These thresholds change yearly.

The Oregon return is due on the same day as your federal return, usually April 15. If you file for a federal extension, you also get an extension for Oregon — you have until October 15 to file. However, an extension to file is not an extension to pay; if you owe Oregon tax, interest and penalties begin accruing on April 15 even if you file late.

You file Oregon Form 40 (the standard individual return) or Form 40-N (a simplified return for certain taxpayers). You can file by mail, electronically through approved software, or through a tax professional. Oregon offers free filing software through its website for lower-income residents.

Deductions and exemptions that reduce your Oregon tax

Oregon allows a standard deduction that reduces your taxable income before tax is calculated. Like the federal standard deduction, Oregon's amount depends on your filing status and age. For 2024, a single filer under 65 has a standard deduction of roughly $2,200; a married couple filing jointly has roughly $4,400. These amounts increase each year.

Oregon also allows a dependent exemption for each may have access to dependent — a child, parent, or other relative who meets the state's rules. The exemption amount changes annually. You claim dependents on your Oregon return using the same rules as your federal return, though the dollar value of the exemption differs.

If you itemize deductions on your federal return instead of taking the standard deduction, you can also itemize on your Oregon return. However, Oregon does not allow all federal deductions; for example, Oregon does not allow a deduction for state and local taxes (SALT) paid to other states. You may end up itemizing federally but taking the standard deduction on Oregon, or vice versa.

Part-year residents and people who move

If you moved to Oregon during the year or moved out of Oregon during the year, you are a part-year resident. You owe Oregon tax only on income earned while you were an Oregon resident. You file Form 40-P (part-year resident return) instead of the standard Form 40.

To determine your residency status, Oregon looks at where you maintained a permanent home and where your primary interests were. If you moved for a job, the date you started work in Oregon (or left Oregon) typically marks the change in residency. You must report the date you became a resident or ceased to be a resident on your return.

If you earned income in another state before moving to Oregon, that income is not subject to Oregon tax. However, you may still owe tax to the state where you earned it. Oregon allows a credit for taxes paid to other states to prevent double taxation, though the credit is limited to the lesser of what you paid or what Oregon would have taxed.

How Oregon income tax differs from federal income tax

Oregon and federal tax are calculated separately using different rules. Your federal taxable income is not automatically your Oregon taxable income. For instance, Oregon does not allow certain deductions that the federal government does, and Oregon's standard deduction and bracket amounts are different.

Oregon also taxes some income that the federal government does not, and vice versa. Some retirement income is treated differently. Oregon's treatment of capital gains is different from federal treatment in some cases. Because of these differences, you may owe federal tax but not Oregon tax, or Oregon tax but not federal tax, depending on your situation.

Tax software designed for Oregon residents accounts for these differences automatically, but if you are doing your own calculations or working with a tax professional, it is important to understand that the two returns are not identical. Starting with your federal return and then adjusting for Oregon-specific rules is the typical approach.

Frequently Asked Questions

Do I have to file an Oregon return if I only lived there part of the year?

Yes, if your income exceeded Oregon's filing threshold while you were a resident. You file Form 40-P and report only the income earned during the months you were an Oregon resident. The threshold is lower than federal, so check Oregon's current requirement even if you would not file federally.

Can I deduct taxes I paid to another state?

Oregon allows a credit for income taxes paid to another state, but only up to the amount of Oregon tax you owe. If you worked in Washington (which has no income tax) and Oregon, you would not get a credit because Washington did not tax you. The credit prevents double taxation but does not create a refund.

Is Social Security taxed in Oregon?

Oregon does not tax Social Security benefits if your total income is below a certain threshold, which varies by filing status. Above that threshold, a portion of your benefits may be taxed. The threshold is higher than the federal threshold, so you may owe federal tax on benefits but not Oregon tax.

What if I am self-employed — do I pay Oregon tax on my net profit?

Yes. You calculate net self-employment income the same way for Oregon as you do for federal — gross income minus business expenses — then explore Oregon's tax rates to that amount. You also owe self-employment tax to the federal government, which is separate.

Do I need to file if I had no income but received a refund last year?

Not necessarily. Oregon's filing requirement is based on income, not on whether you received a refund. If your income is below the threshold for your filing status, you do not have to file. However, if you had taxes withheld and your income is below the threshold, filing a return may result in a refund.