What Oregon taxes you on, and at what rates
Oregon has a state income tax but no sales tax. You pay income tax on wages, self-employment income, interest, dividends, and capital gains. The tax rate depends on your filing status and total income — Oregon uses a progressive system where higher earners pay a higher percentage. For the 2024 tax year, rates range from 4.75% to 9.9% for residents.
Oregon also taxes property through county assessors, though the rate varies by county and the assessed value of your home or land. You do not pay sales tax on purchases in Oregon, which is one reason some people cross state lines to shop in neighboring states that do charge it.
If you work in Oregon but live in another state, or live in Oregon but work elsewhere, you may owe taxes to both states. Oregon has reciprocal agreements with some neighboring states to prevent double taxation, but the rules depend on where you live and where you earn.
Key Takeaways
- Oregon income tax rates range from 4.75% to 9.9% depending on your income and filing status, with no state sales tax.
- Property tax is assessed by your county and varies by location, based on the assessed value of your real estate.
- If you work across state lines, you may owe income tax to both Oregon and your home state unless a reciprocal agreement applies.
- Oregon taxes capital gains at 9.9% if your gains exceed $5,000 in a single year, a rule that took effect in 2022.
- Self-employed Oregonians pay both income tax and self-employment tax, which funds Social Security and Medicare.
Oregon income tax brackets and rates for 2024
Oregon's income tax brackets change each year based on inflation. For single filers in 2024, the brackets are roughly: 4.75% on income up to $3,750; 6.75% from $3,750 to $9,450; 8.75% from $9,450 to $121,500; and 9.9% on income above $121,500. Married couples filing jointly have higher thresholds at each bracket.
The state publishes updated brackets every January on the Oregon Department of Revenue website. Your actual tax bill depends on which bracket your total income falls into — you do not pay the top rate on all your income, only on the portion that falls within that bracket.
Oregon also allows a standard deduction that reduces your taxable income before the tax is calculated. For 2024, the standard deduction is $4,620 for single filers and $9,240 for married couples filing jointly. If your income is below these amounts, you may not owe Oregon income tax at all.
Property tax: how it works and what you pay
Oregon property tax is assessed by your county assessor and collected by your county tax collector. The amount you pay depends on the assessed value of your property and your county's tax rate. Counties set their own rates, so a home worth the same amount in two different counties can have different tax bills.
Your property is reassessed every year, though Oregon has a property tax limitation called Measure 50 that caps how much your assessed value can increase annually. This means your tax bill may not rise as fast as your home's market value does. When you buy a property, it is reassessed at the purchase price, which can cause a jump in your tax bill.
Property tax bills are usually due in three installments throughout the year. If you have a mortgage, your lender may collect property tax as part of your monthly payment and pay it on your behalf. Renters do not pay property tax directly, but landlords pass the cost along through rent.
Self-employment tax and business income
If you are self-employed in Oregon, you pay both Oregon income tax and federal self-employment tax. Self-employment tax funds Social Security and Medicare and is calculated on your net business income — what you earn after deducting business expenses.
Oregon does not have a separate self-employment tax; instead, your net business income is added to any other income you have and taxed at the regular income tax rates. However, you can deduct half of your self-employment tax payment from your federal taxable income, which reduces what you owe to Oregon as well.
If your business is structured as an S corporation or LLC, the tax treatment may differ. Many self-employed people work with a tax professional to determine the structure that saves them the most money, since the rules are complex and depend on your specific situation.
Capital gains tax in Oregon
Oregon taxes capital gains — the profit you make when you sell an investment or asset — at 9.9%, the state's top income tax rate. However, this tax only applies if your total capital gains in a year exceed $5,000. Gains below that threshold are not taxed under this rule.
The capital gains tax covers the sale of stocks, bonds, real estate (other than your primary home), and other investments. Your primary residence is exempt — you do not pay Oregon capital gains tax when you sell the home you live in, though you may owe federal tax depending on how much profit you made.
If you have capital losses in the same year, you can subtract them from your gains to reduce the amount subject to tax. Losses that exceed your gains in a year can sometimes be carried forward to reduce gains in future years, though the rules are specific and a tax professional can help you understand what applies to your situation.
Working across state lines: Oregon and neighboring states
If you live in Oregon and work in Washington, California, or Idaho, you owe income tax to Oregon on all your income. Washington has no state income tax, so you would only owe Oregon tax. California and Idaho both have income taxes, so you may owe tax to both states.
Oregon has a reciprocal agreement with Washington that prevents double taxation if you live in Washington and work in Oregon. Under this agreement, you pay Washington tax (or no tax, since Washington has none) rather than Oregon tax on your wages. You must file a form with your Oregon employer to claim this exemption.
If you live in Oregon and work in California or Idaho, you typically owe tax to both states on the income you earned there. However, most states allow a credit for taxes paid to another state, so you do not pay the full rate twice. A tax professional can help you understand your specific situation and file correctly in both states.
Tax deductions and credits available to Oregon residents
Oregon allows a standard deduction that reduces your taxable income, or you can itemize deductions if they are larger. Common itemized deductions include mortgage interest, property taxes, charitable donations, and medical expenses above a certain threshold. The choice between standard and itemized depends on your situation.
Oregon also offers tax credits for certain situations: the dependent exemption credit, the earned income credit (which mirrors the federal credit for lower-income workers), and credits for education expenses. Some credits are refundable, meaning you can receive money back even if you owe no tax; others only reduce the tax you owe.
If you are over 62 or disabled, Oregon offers a property tax deferral program that lets you delay paying property tax until you sell your home or pass away. This is not a deduction but a way to reduce your when ready cash burden while keeping your home.
How to file Oregon state taxes
You file Oregon state taxes using Form OR-40, the Oregon Individual Income Tax Return. You can file on paper by mailing it to the Oregon Department of Revenue, or you can file electronically through the state's website or a tax software provider. E-filing is faster and reduces errors.
Oregon taxes are due on the same date as federal taxes: April 15 of the year following the tax year. If you file for an extension with the IRS, the extension automatically applies to Oregon as well. If you owe money, you can pay online, by mail, or through your bank.
If you are due a refund, Oregon processes it within four to six weeks if you file electronically, or longer if you file on paper. You can check the status of your refund on the Oregon Department of Revenue website by entering your Social Security number and refund amount.
Frequently Asked Questions
Do I have to file Oregon taxes if I only lived there part of the year?
Yes, if you were a resident for any part of the tax year, you file as a full-year resident and report all your income. If you moved to Oregon partway through the year, you file as a part-year resident and report only the income you earned while living there. You will need to show proof of when you moved, such as a lease or utility bill.
What happens if I do not file Oregon taxes?
The Oregon Department of Revenue can assess penalties and interest on unpaid taxes. If you owe a significant amount, the state can place a lien on your property or intercept your tax refund. If you cannot pay in full, you can set up a payment plan with the state.
Can I deduct federal taxes paid from my Oregon income?
No, Oregon does not allow you to deduct federal income taxes from your state taxable income. However, you can deduct state income taxes from your federal return if you itemize deductions.
Is Social Security income taxed in Oregon?
Oregon does not tax Social Security benefits, even if your total income is high. However, if you have other income sources, that income is still taxed at the regular rates.
What is the Oregon Earned Income Credit, and how do I claim it?
The Oregon Earned Income Credit is a refundable tax credit for workers with lower incomes. You claim it on your tax return by entering your federal earned income credit amount. Oregon's credit is a percentage of the federal credit and can result in a refund even if you owe no state tax.