How Much Is Your Income Tax in Oregon?

Oregon levies its own income tax on residents and those earning income within its borders, operating independently of the federal system. This guide clarifies Oregon’s tax system, from rates to filing.

Oregon Income Tax Rates

Oregon employs a progressive income tax system, taxing different portions of income at increasing rates. Tax rates and brackets depend on filing status and change annually; consult the Oregon Department of Revenue (ODR) for current information. For the 2024 tax year, Oregon’s personal income tax rates range from 4.75% to 9.9%.

For a single filer or someone married filing separately, income up to $4,300 is taxed at 4.75%. Income between $4,300 and $10,750 is taxed at 6.75%. A rate of 8.75% applies to income from $10,750 up to $125,000, and any income exceeding $125,000 is taxed at 9.9%.

For those filing jointly or as head of household, the income brackets are generally doubled. For instance, income up to $8,600 is taxed at 4.75%, while income between $8,600 and $21,500 is taxed at 6.75%. Income from $21,500 to $250,000 is taxed at 8.75%, and income over $250,000 is subject to the 9.9% rate. This progressive structure means only the portion of income falling within a specific bracket is taxed at its rate, not the entire income.

Determining Oregon Taxable Income

Oregon calculates state taxable income starting with your Federal Adjusted Gross Income (AGI) or Federal Taxable Income. The state makes specific adjustments through additions and subtractions to this federal figure, accounting for differences between federal and state tax laws.

Additions to federal income include interest and dividends from out-of-state municipal bonds, which are taxable in Oregon but often exempt federally. Non-qualified withdrawals from 529 or ABLE accounts may also be added back.

Oregon also allows various subtractions from federal income. These include a deduction for federal income tax paid, interest on U.S. government obligations (such as Treasury bonds, generally exempt from state tax), and Social Security or Railroad Retirement income, which Oregon does not tax.

Oregon Tax Credits and Deductions

After determining your Oregon taxable income, tax credits and deductions can reduce your overall tax liability. Deductions lower taxable income, while credits directly reduce the amount of tax you owe dollar-for-dollar. Oregon offers both standard and itemized deductions; taxpayers choose the option that results in lower tax.

For 2024, the Oregon standard deduction is $2,745 for single filers or married filing separately, $5,495 for married filing jointly or qualifying surviving spouse, and $4,420 for head of household filers. If your Oregon itemized deductions exceed the standard deduction, you can choose to itemize. Oregon’s election to itemize is independent of the federal election.

Oregon also provides various tax credits. Examples include the Earned Income Credit (9% of federal, or 12% for families with a dependent under three) and the Oregon Kids Credit ($1,000 per qualifying child aged 5 or younger, with income limitations). The Political Contribution Credit allows up to $50 for individuals or $100 for joint filers for contributions to Oregon political entities, subject to income phase-outs.

Filing and Paying Oregon Income Tax

Oregon residents with income, and non-residents or part-year residents with Oregon-sourced income, must file a state income tax return. Form OR-40 is for full-year residents, OR-40-P for part-year, and OR-40-N for non-residents. The filing and payment deadline is typically April 15th, aligning with the federal deadline.

Electronic filing is encouraged due to its speed and accuracy, available through approved tax software or ODR’s Direct File Oregon program, which offers free e-filing for most full-year residents. Paper returns can be mailed.

If you anticipate not being able to file by the April 15th deadline, you can request an extension. Oregon generally grants an automatic extension to October 15th if you file a federal tax extension (Form 4868) and do not owe additional tax. An extension to file does not extend the payment deadline; any tax owed must still be paid by the original April 15th due date to avoid penalties and interest. Payments can be made online through Oregon Revenue Online using a bank account (free) or credit/debit card (with a service fee), or by mailing a check or money order with Form OR-40-V.

Individuals with income not subject to withholding, such as self-employment income, may need to make estimated tax payments. These are generally required if you expect to owe $1,000 or more after credits and withholding. Payments are typically due in four installments: April 15th, June 15th, September 15th, and January 15th of the following year. The ODR provides resources, including Publication OR-ESTIMATE, to help taxpayers calculate and make these payments electronically or by mail.