Oregon State Income Tax: Rates and Filing Rules
Learn how Oregon's income tax is calculated, from using federal AGI as a baseline to applying the state-specific adjustments that determine your liability.
Oregon’s personal income tax is a primary source of state revenue, applied to income individuals earn or receive within the state. The amount of tax owed depends on a taxpayer’s financial situation, including their residency status and total income.
Determining Your Filing Requirement
Your requirement to file an Oregon income tax return depends on your residency status and gross income. Oregon defines three residency categories: full-year, part-year, and nonresident. A full-year resident considers Oregon their permanent home all year, while a part-year resident moves into or out of the state during the year. A nonresident has a permanent home outside Oregon but earns income from Oregon sources.
Each residency status has gross income thresholds that determine the need to file. Full-year residents must file an Oregon return if they are required to file a federal return. Part-year residents and nonresidents must file if their total income exceeds the federal filing threshold and they have any income from Oregon sources.
Calculating Your Oregon Taxable Income
Calculating your Oregon taxable income begins with your federal Adjusted Gross Income (AGI). From this starting point, you must make several adjustments specific to Oregon law, categorized as additions and subtractions. A common addition is interest or dividends from bonds issued by states other than Oregon.
You then apply Oregon-specific subtractions. A subtraction for federal income tax paid is limited for the 2024 tax year to $8,250 per return, or $4,125 for married filing separate status. Other subtractions include Social Security and Railroad Retirement Board benefits, which Oregon does not tax, and interest from U.S. government obligations like Treasury bills and savings bonds.
Next, you take either the Oregon standard deduction or itemize your deductions. For the 2024 tax year, the standard deduction is $2,745 for Single, $5,495 for Married Filing Jointly, and $4,420 for Head of Household. Taxpayers should itemize if their total itemized deductions—which can include mortgage interest, certain taxes, and charitable contributions—exceed their standard deduction amount. Subtracting your chosen deduction from your post-adjustment income determines your Oregon taxable income.
Oregon Tax Rates and Credits
Oregon uses a progressive tax system with four marginal tax brackets. For the 2024 tax year, rates begin at 4.75% and increase to 9.9% for the highest earners. The top rate of 9.9% applies to taxable income over $125,000 for single filers. For those filing as married filing jointly, head of household, or qualifying surviving spouse, it applies to income over $250,000.
Oregon offers several tax credits that directly reduce the tax you owe. For the 2024 tax year, the Oregon Kids Credit is a refundable credit of up to $1,000 per qualifying child, age five or younger, for families who meet specific income requirements.
Another is the Political Contribution Credit, available for taxpayers with a federal AGI of $75,000 or less ($150,000 for joint filers), allowing a credit up to $50 ($100 for joint filers) for political donations. Additionally, if you donate to a qualified Oregon cultural nonprofit and make a matching donation to the Cultural Trust, you can claim a credit for the Trust donation, up to $500 for single filers or $1,000 for joint filers.
Local Income Taxes
In addition to the statewide income tax, Oregon imposes a Statewide Transit Tax of 0.1% on all wages. Some residents are also subject to local income taxes imposed by specific jurisdictions.
Widespread local taxes are for transit districts. Individuals who work or reside in parts of Multnomah, Washington, and Clackamas counties are subject to the TriMet transit district tax of 0.8137% of wages. The Lane County Mass Transit District levies a tax of 0.79% of wages on residents and workers within its boundaries.
Portland Metro area residents are subject to additional taxes. The Supportive Housing Services Tax is a 1% tax on taxable income over $125,000 for individuals ($200,000 for joint filers) in parts of Multnomah, Washington, and Clackamas counties. The Preschool for All tax in Portland and Multnomah County has two tiers: 1.5% on taxable income over $125,000 ($200,000 joint), plus an additional 1.5% on income over $250,000 ($400,000 joint). The Portland Arts Tax is a flat $35 tax on adults with income over a set threshold living in a Portland household.
Filing and Paying Your Oregon Taxes
The Oregon Department of Revenue encourages electronic filing through its iWire system or approved tax preparation software. Taxpayers can also file by mail using the appropriate form (OR-40, OR-40-P, or OR-40-N) for their residency status and sending it to the address specified in the instructions.
Payment can be made by direct debit when e-filing, online through the Department of Revenue’s portal, or by mailing a check or money order. The deadline for filing and paying is typically April 15. Estimated tax payments may be required throughout the year for those with income not subject to withholding, such as from self-employment, if they expect to owe $1,000 or more in tax.