Income Tax in Oregon: Complete Guide 2026
Data Notice: Figures, rates, and statistics cited in this article are based on the most recent available data at time of writing and may reflect projections or prior-year figures. Always verify current numbers with official sources before making financial, medical, or educational decisions.
Income Tax in Oregon: Complete Guide 2026
Tax information is for educational purposes only and does not constitute tax advice. Consult a licensed tax professional for your specific situation.
Oregon relies heavily on its income tax because the state has no sales tax. The individual income tax uses a four-bracket graduated system with rates from ~4.75% to ~9.90%. The top rate kicks in at ~$125,000 for single filers and ~$250,000 for joint filers. Some Oregon cities, including Portland, levy additional local income taxes that can push the total rate above ~13.00% when combined with federal taxes. Oregon’s high reliance on income tax makes it critical for residents and those working in the state to understand how the system operates.
Oregon Income Tax Rates (2026)
Single Filers
| Taxable Income | Rate |
|---|---|
| $0 — ~$4,050 | ~4.75% |
| ~$4,051 — ~$10,200 | ~6.75% |
| ~$10,201 — ~$125,000 | ~8.75% |
| Over ~$125,000 | ~9.90% |
Married Filing Jointly
| Taxable Income | Rate |
|---|---|
| $0 — ~$8,100 | ~4.75% |
| ~$8,101 — ~$20,400 | ~6.75% |
| ~$20,401 — ~$250,000 | ~8.75% |
| Over ~$250,000 | ~9.90% |
Local Taxes (Portland Metro Area)
| Tax | Rate | Threshold |
|---|---|---|
| Multnomah County Preschool for All | ~1.50% | Income over ~$125,000 (single) |
| Metro Supportive Housing Services | ~1.00% | Income over ~$125,000 (single) |
Portland-area residents with higher incomes can face combined state and local rates of ~12.40% before accounting for federal taxes.
How Oregon Income Tax Works
No Sales Tax, High Income Tax
Oregon is one of only five states with no statewide sales tax, which means the state funds government services primarily through income taxes. This makes Oregon’s income tax system the dominant tax consideration for residents.
Standard Deduction
Oregon offers its own standard deduction:
| Filing Status | Standard Deduction |
|---|---|
| Single | ~$2,745 |
| Married filing jointly | ~$5,495 |
| Head of household | ~$4,420 |
These amounts are significantly lower than federal standard deduction levels, which means many Oregon filers benefit from itemizing.
Itemized Deductions
Oregon generally conforms to federal itemized deduction rules with several exceptions:
- State income taxes paid: Not deductible on the Oregon return
- Mortgage interest: Deductible following federal rules
- Charitable contributions: Deductible following federal rules with Oregon modifications
- Medical expenses: Deductible for amounts exceeding ~7.50% of federal AGI
- Federal tax liability: Oregon allows a credit for federal taxes that is built into the rate structure
Oregon’s Unique Tax Credits
Oregon is known for having a large number of tax credits. The state periodically reviews and sunsets credits, so it is important to verify availability each year.
Retirement Income
Oregon taxes most retirement income, including pensions, 401(k) and IRA distributions. However, the state offers a retirement income credit for qualifying filers:
- Filers age 62 or older with household income under ~$22,500 (single) or ~$45,000 (joint) may claim a credit of up to ~$7,050 (joint) against retirement income.
Social Security benefits are not taxed at the federal level for most moderate-income filers, and Oregon follows the federal treatment.
Key Oregon Tax Credits
- Earned Income Credit: Oregon offers a refundable EITC equal to ~12% of the federal credit for filers with dependents and ~9% for filers without.
- Working Family Household and Dependent Care Credit: Refundable credit for childcare expenses, ranging from ~4% to ~60% of qualifying costs based on income.
- Oregon 529 Plan Credit: A credit of up to ~$300 (single) or ~$600 (joint) for contributions to an Oregon 529 plan.
- Political Contribution Credit: A credit of up to ~$50 (single) or ~$100 (joint) for contributions to qualifying political campaigns.
- Retirement Income Credit: Up to ~$7,050 for qualifying seniors with limited income.
Who Must File in Oregon
You must file an Oregon return (Form OR-40) if:
- You are a full-year resident with gross income exceeding the filing threshold
- You are a part-year resident or nonresident with Oregon-source income (Form OR-40-P or OR-40-N)
- You owe any Oregon tax, including local income taxes
- You want to claim a refund of Oregon withholding
The filing deadline is April 15.
Comparison to National Average
| State | Top Income Tax Rate | Sales Tax |
|---|---|---|
| Oregon | ~9.90% | None |
| California | ~13.30% | ~7.25% |
| Washington | 0% | ~6.50% |
| Idaho | ~5.80% | ~6.00% |
| Nevada | 0% | ~6.85% |
| National average | ~4.60% | ~5.09% |
Oregon’s top rate is among the highest in the nation, but the absence of a sales tax means the overall tax burden is not as extreme as the income tax rate alone suggests.
Tips for Minimizing Oregon Income Tax
-
Itemize when possible. Oregon’s low standard deduction (~$2,745 single) means many filers save more by itemizing.
-
Maximize retirement contributions. Traditional 401(k) and IRA contributions reduce federal AGI, which directly lowers Oregon taxable income.
-
Claim the 529 credit. Contributions to an Oregon 529 plan earn a credit of up to ~$300 (single) or ~$600 (joint).
-
Use the Working Family Household and Dependent Care Credit. This refundable credit can cover a substantial portion of childcare costs for lower-income families.
-
Contribute to political campaigns. The political contribution credit of
$50/$100 is a dollar-for-dollar tax reduction that many filers overlook. -
Understand Portland-area local taxes. If you live or work in the Portland metro area, plan for the additional ~1.00% to ~2.50% in local income taxes.
-
Check the retirement income credit. Seniors with modest incomes can significantly reduce their Oregon tax liability through this credit.
Key Takeaways
- Oregon has four income tax brackets ranging from ~4.75% to ~9.90%, among the highest state rates nationally.
- Oregon has no sales tax, making income tax the primary revenue source.
- The standard deduction is low (~$2,745 single), so itemizing often provides greater savings.
- Portland-area filers may owe additional local income taxes totaling up to ~2.50%.
- The state EITC provides ~9% to ~12% of the federal credit as a refundable benefit.
- Seniors with limited income can claim a retirement income credit of up to ~$7,050.
Next Steps
- Federal Income Tax Guide 2026 — See how federal AGI affects your Oregon return.
- State Income Tax Rates Comparison 2026 — Compare Oregon to all 50 states.
- Tax Bracket Calculator — Estimate your combined federal and Oregon tax.
- Self-Employment Tax Guide — Oregon considerations for self-employed filers.
- Find a CPA Near You — Get professional help with Oregon’s high-rate system.