How Oregon taxes income
Oregon uses a graduated income tax with 4 brackets, running from 4.75% up to 9.9%. A filer on $85,000 pays an effective 6.87%. The top rate is the last slice, not the whole bill (how graduated rates work).
The top bracket starts at $125,000 of taxable income, so it applies only to higher earners.
Oregon income tax brackets for 2026
Single filer rates. Married couples filing jointly use the same rates over wider bands, which still does not make filing jointly cheaper here: on $120,000 a joint return owes $8,100 against $7,900 for two single filers on $60,000 each, so the couple pays $200 more.
| Rate | Taxable income over |
|---|---|
| 4.75% | $0 |
| 6.75% | $4,550 |
| 8.75% | $11,400 |
| 9.9% | $125,000 |
Worked examples for Oregon
Using Oregon's 2026 rates, standard deduction and exemptions:
| Situation | Oregon tax | Effective state rate |
|---|---|---|
| Single, $60,000 | $3,974 | 6.62% |
| Single, $120,000 | $9,161 | 7.63% |
| Married filing jointly, $120,000 | $8,061 | 6.72% |
The joint figure is lower than the single figure on the same $120,000 only because the joint return covers two people's exemptions or credits; the rates themselves are the same.
Deductions and exemptions
Oregon allows a state standard deduction of $2,910 for a single filer and $5,820 for a married couple filing jointly.
Rather than a personal exemption, Oregon delivers the equivalent relief as a tax credit ($263 per person, none above federal AGI of $100,000 single or $200,000 joint). A credit reduces the tax itself rather than the income it is charged on, which is generally worth more to lower earners than an equivalent deduction.
All told, an $85,000 salary is taxed on $73,340, after the deduction for federal income tax as well.
Rules specific to Oregon
The provisions published for Oregon:
- The personal exemption credit is not allowed if federal AGI exceeds $100,000 for single filers or $200,000 for MFJ.
Provision notes quoted from the Tax Foundation's State Individual Income Tax Rates and Brackets, which is also the source of the rate and bracket data on this page.
Local income taxes in Oregon
Oregon is one of eleven states where counties or cities levy their own income tax on top of the state rate. Averaged across the state, local income tax runs about 0.18% of AGI, and in the heaviest-taxed localities it is considerably more. Switch it on above for an estimate, or see how local income tax works across all eleven states.
The kicker: Oregon refunds its own surplus
Oregon has a constitutional provision no other state shares. If actual revenue over a two-year budget cycle exceeds the official forecast by more than 2%, the entire surplus, not the excess above the threshold, the whole of it, must be returned to taxpayers. It comes back as a credit on the following year's return, in proportion to what each taxpayer paid, and it has been triggered repeatedly and at very large sums.
The kicker is why an Oregon tax year cannot be read from the rate table alone: a household's effective rate in a kicker year is materially below the 9.9% ceiling above, and the calculator here does not model it.
Oregon also charges no general sales tax (the 0% above is an absence), which alongside four income tax bands makes the income tax carry an unusually large share of the total burden. Portland-area residents additionally pay local income taxes for transit and regional programs that the state figure does not include.
Part-year residents and out-of-state income
Oregon has no reciprocity agreements, so if you live here and work in another state, or move mid-year, you will generally file in both, and claim a credit rather than an exemption. How the credit works, and why moving to a higher-tax state still costs you.
Retirement income in Oregon
Oregon does not tax Social Security benefits, which puts it with the large majority of states. Pensions and IRA or 401(k) withdrawals are treated separately. See how states treat retirement income.
As an upper bound, $60,000 of retirement income taxed as ordinary wage income would cost about $4,000 here, an effective 6.62%. Any exclusion Oregon grants for pension or retirement-account income comes off that figure, so a retiree's real rate is usually lower than the brackets above suggest.
How Oregon compares
Oregon's top marginal rate of 9.9% ranks 6 of the 42 jurisdictions that tax income (41 states and D.C.). Washington has no income tax at all. California tops out at 13.3%. Idaho tops out at 5.3%. Nevada has no income tax at all.
Filing and deadlines
Oregon's return is due in mid-April with your federal return. Deadlines and extensions covers the off-cycle states and what an extension does not buy you.
What this estimate covers
The figure applies Oregon's published 2026 rates and deductions to wage income, alongside federal tax and FICA (a well-sourced estimate, not a return). See what these calculators do and do not model.