Oregon Department of Revenue : Personal Income Tax : Individuals : State of Oregon

Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, and Wyoming are the only states without a state income tax. In New Hampshire, only interest and dividends are taxed, whereas Washington solely taxes capital gains. With a rate of 7.25%, California has the highest state sales tax. Indiana, Mississippi, Rhode Island, and Tennessee were a close second with a 7% state sales tax. Alaska, Delaware, Montana, New Hampshire, and Oregon are the five states with no sales tax. Staying informed about Oregon’s tax system will help you make smart financial decisions, whether you’re a long-time resident, a new arrival, or someone with a pending application.

Oregon Retirement Tax Friendliness

• Property deemed acquired prior to January 20, 2025, based on prior regulatory guidance, would remain subject to the Tax Cuts and Jobs Act phase-down, which provides a 40% bonus depreciation rate for 2025 and 20% for 2026.
• The credit is calculated according to a fairly complicated formula, but it is equal to no more than 9% of your pension income.
• After completing the transaction, you will receive a confirmation number as proof of payment.
• If income reported on a return doesn’t match the income reported by employers, the return, and any corresponding refund, will be delayed.
• If you earn income in Oregon, you know you’ll lose something to taxes.
• From the coast to the Cascade Mountains to the wine regions scattered throughout the state, there are many great places for a retirement in Oregon.

When the reentry program was approved, Oregon was granted the ability to use designated state health program dollars to cover its portion of the program’s financing. The state also needed an exemption from a longstanding federal policy that largely prevents people living in certain facilities, like prisons, from accessing Medicaid benefits. does oregon have state income tax Put all those lists together and you’ll arrive at the following states that don’t tax any retirement income. They’ll not touch your Social Security benefits, earned income, dividends, interest, retirement account withdrawals, and pension benefits. The two most popular tax software packages are H&R Block At Home, sold by the H&R Block tax preparation company, and TurboTax Federal & State, sold by the Intuit software company. Both companies produce multiple editions for simple to very complex tax returns, so be sure to carefully compare the features offered by each package.

• The only way to stop these new tax breaks is for the Oregon legislature to vote to reject them — to “disconnect” from them.
• If you spent the entire tax year living outside Oregon and are not an Oregon resident, you are only required to pay Oregon income tax on income earned from sources within Oregon.
• Our withholding calculator will help you get the correct amount of tax withheld.
• Instead of working with CPAs, attorneys and others separately, Start brings all of them under a single subscription.
• For all of the tax forms we provide, visit our Oregon tax forms library or the ‘s tax forms page.

Oregon State Income Tax Rates and Brackets for 2025 Explained

• In addition to the payment options below, we also accept payments in person at our office locations.
• Notify us within 90 days of the final determination by filing an amended return.
• Oregon’s high income taxes are partially due to the fact that Oregon has no state sales tax.
• These credits can make a big difference when it’s time to file your taxes.
• If you’re looking to plan ahead, the state offers a simple tax calculator to estimate your tax liability.

There are some exceptions, such as for farmers and fishermen. Download Publication OR-ESTIMATE​​, for more information about estimated personal income tax payments. Let’s consider a single individual whose ordinary income is $350,000. This individual would qualify for the $15,000 standard deduction, reducing his or her taxable income to $335,000, putting them in the 35% tax bracket. As a result of the progressive How to Run Payroll for Restaurants tax system, however, not every dollar they earn will be taxed at that rate.

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A tax credit allows taxpayers to reduce the amount of taxes they are required to pay. This is different from a tax deduction, which reduces the amount of income that is subject to taxation. Tax credits are applied directly to the tax liability, while deductions are applied to the taxable income.

Do the amounts entered in the wage and commission factor come from the federal return or the annual statement?

The 2025 state income tax rates and brackets apply to income earned from January 1, 2025, through December 31, 2025. Taxpayers will use these rates when filing their returns in early 2026. It’s important to note that withholding and estimated tax payments throughout 2025 should reflect these rates to avoid underpayment penalties. Oregon has a graduated state individual income tax, with rates ranging from 4.75 percent to 9.9 percent. There are also jurisdictions that collect local income taxes.

• Budgetary needs drive the tax rates of each state, funding essentials like schools, roads, and public safety.
• Here’s a quick look at some of the most common credits and how they work.
• Although these materials have been prepared by professionals, the user should not substitute these materials for professional services, and should seek advice from an independent advisor before acting on any information presented.
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• “This decision risks making addiction recovery harder and our communities less stable if people come out underprepared for the health challenges of reentry,” she continued.
• The hold period has been completed and most taxpayers can expect to receive their refunds within two weeks of the date their return is filed.

It’s also important to remember federal estate tax also applies if your estate is above a certain threshold ($13.61 million in 2024 for individuals). Katelyn has more than 6 years of experience working in tax and finance. She believes knowledge is the key to success and enjoys providing content that educates and informs. As the market share of electric vehicles (EVs) on the road grows, the gas tax’s ability to fund road projects and decrease traffic congestion erodes.

While the state is one of only five in the US not to impose sales and normal balance use taxes, the state makes up for this by charging higher tax rates in other areas, such as higher-than-average property taxes and imposing estate taxes. The structure of the measure guarantees that the revenue losses will grow over time. In 1997, the enactment of Measure 50 severed the basis of property taxes from the traditional real market value to an “assessed value” that, generally speaking, may not grow by more than 3 percent per year. Until one of those events happens, the assessed value remains frozen at the level when the homeowner first enrolled the property in the program administering the property tax freeze. And every year of eligibility, the difference between the assessed value under Measure 50 and the frozen level under the tax freeze grows, increasing the property tax loss to the local taxing jurisdiction. The current tax structure was shaped by the Student Success Act (House Bill 3427), passed in 2019.

It can be smart to set up multiple income streams, perhaps from dividend-paying stocks, pensions, Social Security, annuities, and retirement account withdrawals. But it’s probably not as bad as you fear, if your state is among them. Tax-Rates.org provides easy access to five of the most commonly used Oregon income tax forms, in downloadable PDF format. For all of the tax forms we provide, visit our Oregon tax forms library or the ‘s tax forms page.