Oregon Income
Tax Rates & Rules

Oregon uses progressive individual income tax rates of 4.75 percent, 6.75 percent, 8.75 percent plus 9.9 percent in 2026. The state starts with federal taxable income, then applies Oregon additions, subtractions and modifications before calculating state tax.

Oregon Income Tax Brackets for 2026

Oregon has two main rate charts. Single and married filing separately use Chart S, while married filing jointly, head of household plus qualifying surviving spouse use Chart J.

These are marginal tax brackets. Only the portion of taxable income inside each range is taxed at that range's rate.

Oregon Taxable Income Starts With Federal Taxable Income

Oregon taxable income is federal taxable income adjusted by Oregon additions, subtractions plus other state modifications. The calculation can therefore differ from both federal taxable income and federal adjusted gross income.

• Determine federal taxable income.
• Add amounts that Oregon requires to be added back.
• Subtract income or deductions that Oregon specifically excludes.
• Apply Oregon deductions and the federal tax subtraction when eligible.
• Calculate Oregon taxable income.
• Apply the 2026 rate chart for the filing status.
• Apply nonrefundable and refundable Oregon tax credits.

Oregon Standard Deduction and Personal Exemption Credit for 2026

The estimated 2026 Oregon basic standard deduction is $2,900 for single or married filing separately, $4,650 for head of household plus $5,800 for married filing jointly or qualifying surviving spouse. Additional standard deduction amounts can apply for age or blindness.

Oregon also uses a personal exemption credit rather than a personal exemption deduction. The 2026 estimated personal exemption credit is $260 for each qualifying exemption, subject to Oregon's income limits. The federal tax subtraction can be as high as $8,750 for 2026 before phaseout rules are applied.

Who Must File an Oregon Income Tax Return?

Oregon filing depends on residency, filing status plus gross income. Full-year residents use Form OR-40, part-year residents generally use Form OR-40-P and nonresidents generally use Form OR-40-N.

A full-year resident files when gross income exceeds the amount shown for the filing status in Oregon's annual filing chart. A part-year resident or nonresident compares the applicable filing threshold with Oregon-source gross income plus resident-period income when filing a part-year return.

Even when a taxpayer is below the normal filing threshold, filing can still be necessary to claim a refund of Oregon income tax withheld from pay.

Oregon Residents, Part-Year Residents and Nonresidents

A full-year Oregon resident is generally taxed on taxable income from all sources. A nonresident is taxed on Oregon-source taxable income. A part-year resident is taxed on income from all sources while an Oregon resident plus Oregon-source income received while a nonresident.

Oregon also treats certain residents as nonresidents for tax purposes when they maintain a permanent home outside Oregon, do not keep an Oregon home plus spend fewer than 31 days in Oregon during the year. The state's residency rules should be applied before choosing Form OR-40, OR-40-P or OR-40-N.

Does Oregon Tax Remote Workers?

Oregon generally taxes a nonresident employee only on wages for work physically performed in Oregon. If a nonresident works from home or another location outside Oregon, Oregon does not tax the wage portion attributable to those outside-Oregon workdays.

An Oregon resident working remotely for an out-of-state employer is generally taxed by Oregon on the wages because residents are taxed on income from all sources. Work location can still affect withholding plus credit-for-other-state-tax issues.

For a payroll estimate based on current wages and Oregon withholding, use the Oregon paycheck calculator rather than applying the 9.9 percent top rate directly to one paycheck.

Oregon Withholding Uses Form OR-W-4

Oregon employees use Form OR-W-4 to provide state withholding information. The 2026 withholding instructions build the basic Oregon standard deduction plus federal tax subtraction into the employer's payroll formula.

Withholding is a prepayment toward annual Oregon income tax. Changes in filing status, dependents, deductions, credits plus nonwage income can cause annual tax to differ from the amount withheld during the year.

Oregon Estimated Tax Starts at a $1,000 Expected Balance

Oregon generally requires estimated tax payments for 2026 when a taxpayer expects to owe $1,000 or more after withholding and credits and the estimated withholding will be below the state's safe-harbor level.

For most taxpayers, the required annual payment is based on 90 percent of 2026 tax after credits or 100 percent of 2025 tax after credits. Calendar-year installment dates are April 15, June 15, September 15 plus January 15 of the following year.

Oregon Does Not Tax Social Security Benefits

Oregon does not tax Social Security or Railroad Retirement Board benefits. Other retirement income can be taxable to an Oregon resident depending on the type of payment and Oregon-specific subtraction rules.

For a retiree who is domiciled in Oregon but files as a nonresident under Oregon's special residency rules, retirement income can still be subject to Oregon tax. If the retiree is not domiciled in Oregon, federal law generally prevents Oregon from taxing retirement income.

Oregon Tax Credits Can Materially Change Final Liability

Tax credits are applied after Oregon tax is calculated and can change the final amount due even when taxable income is unchanged. For 2026, Oregon increased the state Earned Income Credit to 14 percent of the federal EITC, or 17 percent for qualifying taxpayers with a dependent under age three.

Oregon also has personal exemption credits plus other family, education and savings-related credits. Eligibility varies by income, household facts plus the specific credit, so a gross-income tax estimate should not be treated as the final return result.

Oregon's Statewide Transit Tax Is Separate From Personal Income Tax

Oregon's Statewide Transit Tax is a payroll tax that remains at 0.1 percent of covered wages in 2026. It is separate from Oregon personal income tax and should not be added to the 4.75 percent through 9.9 percent income tax brackets as if it were another bracket.

The distinction matters for payroll. A paycheck can show Oregon income tax withholding plus Statewide Transit Tax at the same time even though the two amounts are governed by different rules.

Payroll Records Help Reconcile Oregon Income Tax

Pay stubs are useful for tracking Oregon withholding, transit tax, gross wages plus year-to-date payroll totals. The annual Oregon return still determines final income tax after state additions, subtractions, deductions plus credits.

After genuine payroll amounts are verified, the Oregon pay stub generator can organize earnings and deductions into a clear record. The main paystub generator is intended for lawful payroll, business and recordkeeping purposes.