State Income Tax Range
Low: 5% (on up to $3,300 of taxable income for single filers and up to $6,600 for married couples filing jointly)
High: 9.9% (on taxable income over $125,000 for single filers and over $250,000 for married couples filing jointly). Residents can deduct some of their federal income tax from state taxable income. The subtraction for 2017 is limited to $6,500 ($3,250 if married filing separately), and is further limited for high-income earners.
Effective income tax rate: 7.9% single/ 8.1% joint
Tax on Social Security
Benefits are not taxed.
Exemptions for Other Retirement Income
Most new residents will find that their pension income, along with most other income, is taxed by Oregon. If you receive a U.S. government pension, however, you may be entitled to subtract part or all of that pension on your Oregon individual income tax return. The state also does not tax Railroad Retirement benefits. And depending on your age and income, you may be entitled to a retirement-income credit on your Oregon return. The credit is the lesser of your tax liability or 9% of taxable pension income. Oregon also allows a credit for the elderly or disabled if you qualify for the federal elderly-or-disabled credit; however, you cannot claim this credit if you are claiming the retirement-income credit. The Oregon elderly-or-disabled credit is 40% of the federal credit. Oregon allows residents to subtract their current year’s federal income tax liability, after credits, up to $6,250, based on income and filing status.
IRAs
Qualifies for retirement-income credit.
401(k)s and Other Defined-Contribution Employer Retirement Plans
Qualifies for retirement-income credit.
Private Pensions
Qualifies for retirement-income credit.
Public Pensions
Qualifies for retirement-income credit. Also, some or all of federal pension income may be subtracted from Oregon taxable income.
For details on other state taxes as well as state tax breaks for retirees see the complete guide to taxes on retirees in Oregon.
