Oregon taxes your income, and the rate depends on how much you earn
Oregon has a progressive income tax system, which means the tax rate increases as your income goes up. You do not pay one flat rate on all your earnings—instead, your income is divided into brackets, and each bracket is taxed at its own rate. For the 2024 tax year, Oregon's rates range from 4.75% on the lowest bracket to 9.9% on the highest.
Oregon also taxes certain types of investment income, capital gains, and business earnings. The state does not have a sales tax, which is one of the few states with that distinction. However, Oregon does tax property and has other smaller taxes on things like cigarettes and alcohol.
If you work in Oregon or live there, you will file a state income tax return with the Oregon Department of Revenue. The filing important date is usually April 15, the same day as your federal return, though you can request an extension.
Key Takeaways
- Oregon uses tax brackets that range from 4.75% to 9.9%, so your rate depends on your total income for the year.
- Oregon has no sales tax, but it does tax income, capital gains, and certain investment earnings.
- You file your state return with the Oregon Department of Revenue by April 15 unless you request an extension.
- Your employer will withhold state income tax from your paycheck if you work in Oregon, and you can adjust how much is withheld using Form OR-W4.
- If you owe money at tax time, you can set up a payment plan with the Oregon Department of Revenue rather than paying in full when ready.
Oregon's tax brackets for 2024
Oregon's income tax brackets are adjusted each year for inflation. For the 2024 tax year, here is how the brackets work for single filers:
| Income Range | Tax Rate |
|---|---|
| $0 to $3,750 | 4.75% |
| $3,751 to $9,450 | 6.75% |
| $9,451 to $125,000 | 8.75% |
| Over $125,000 | 9.9% |
If you file as married filing jointly, the income ranges are wider—for example, the 4.75% bracket goes up to $7,500 instead of $3,750. The Oregon Department of Revenue publishes updated brackets each January, so the numbers change year to year.
The brackets mean that if you earn $50,000 as a single filer, you do not pay 8.75% on all of it. Instead, you pay 4.75% on the first $3,750, then 6.75% on the next $5,700, then 8.75% on the remaining $40,550. Your effective tax rate—the actual percentage of your total income that goes to taxes—is lower than your top bracket rate.
How withholding works and adjusting it
If you are employed in Oregon, your employer withholds state income tax from your paycheck automatically. The amount withheld is based on the information you provide on Form OR-W4, which you fill out when you start a job or whenever your situation changes.
On the OR-W4, you claim dependents and can request extra withholding if you want more money taken out each pay period. If you have a second job, work as a contractor, or have other income sources, you may need to adjust your withholding so you do not owe a large amount at tax time. You can file a new OR-W4 with your employer at any time.
If you are self-employed or have income that is not subject to withholding, you may need to make quarterly estimated tax payments to Oregon. The Oregon Department of Revenue provides a worksheet to help you calculate what you owe each quarter.
Filing your Oregon state return
You file your Oregon state income tax return using Form OR-40 if you are a resident, or Form OR-40-N if you are a nonresident with Oregon income. Both forms are available on the Oregon Department of Revenue website. You can file by mail, or you can file electronically using tax software or a tax professional.
Oregon offers free tax preparation through the Volunteer Income Tax information (VITA) program if your income is below a certain threshold—usually around $60,000, though this varies by year. You can find a VITA site near you through the IRS website or by calling 211.
The important date to file is April 15 unless you request an extension. If you request an extension, you have until October 15 to file, but any taxes you owe are still due by April 15 or you will owe interest and penalties.
What happens if you owe Oregon taxes
If your withholding was not enough and you owe money when you file, you can pay in full by the April 15 important date, or you can set up a payment plan with the Oregon Department of Revenue. The department offers short-term plans (up to 120 days) at no cost, and longer-term installment agreements that charge interest.
If you do not pay by the important date and do not set up a plan, Oregon will charge you interest on the unpaid balance and may add penalties. The interest rate is set quarterly and changes based on the federal rate. If you owe a significant amount, it is worth contacting the Oregon Department of Revenue to discuss your options before the important date.
If you overpaid through withholding and are due a refund, Oregon will mail it to you or deposit it directly to your bank account if you provided that information on your return. Refunds typically arrive within four to six weeks of filing, though it can take longer during busy tax season.
Other Oregon taxes you may encounter
Oregon's income tax is the main tax most residents pay, but the state also collects other taxes. There is no sales tax in Oregon, which means you do not pay tax at the register when you buy goods. However, Oregon does tax services in some cases, and certain items like prepared food may be taxed differently than groceries.
Oregon taxes property owners based on the assessed value of their home or land. The property tax rate varies by county and by the type of property. Renters do not pay property tax directly, but landlords may pass some of the cost along in rent.
The state also collects excise taxes on cigarettes, alcohol, and marijuana. These are included in the price you pay at the store, so you see them at checkout. Oregon also has a capital gains tax on the sale of certain long-term investments, though there are exemptions for primary residences and some other assets.
Frequently Asked Questions
Do I have to file an Oregon state return if I do not owe taxes?
If your income is below the filing threshold for your filing status, you do not have to file. However, if you had taxes withheld from your paycheck, you should file to get a refund. The filing threshold varies by age and filing status, so check the Oregon Department of Revenue website or call them to confirm whether you need to file.
What if I moved to Oregon partway through the year?
You file as a nonresident for the part of the year you did not live in Oregon, using Form OR-40-N. You only pay Oregon tax on income you earned while you were a resident. Your previous state may also require a return for the months you lived there, so you may need to file in both states.
Can I deduct federal taxes I paid from my Oregon state taxes?
No. Oregon does not allow you to deduct federal income taxes paid. However, you can deduct state and local property taxes, and you may be able to deduct other items depending on your situation. The Oregon Department of Revenue provides a worksheet with the current deductions allowed.
What if I disagree with my Oregon tax bill?
You can file a protest with the Oregon Department of Revenue within 60 days of receiving the bill. You will need to explain why you believe the bill is wrong and provide supporting documents. If you disagree with the department's response, you can appeal to the Oregon Tax Court, though you may want to consult a tax professional before doing so.
Does Oregon tax retirement income differently?
Oregon does tax most retirement income, including distributions from 401(k)s and IRAs. However, there is a retirement income exclusion that may reduce the amount you have to pay tax on if you are over 62 and meet certain income limits. The exclusion amount changes each year, so check with the Oregon Department of Revenue or a tax professional to see if you may have access to.