How Much Is Oregon Income Tax? Brackets, Credits, and Kicker

Oregon income tax rates run from 4.75 percent to 9.9 percent across four graduated brackets, with the top rate applying to taxable income above $125,000 for single filers and $250,000 for joint filers.¹ Because the state has no general sales tax, income tax does most of the work of funding public services, and residents in the Portland metro area often owe additional local income taxes on top of the state rate.

The 2025 Tax Brackets

Oregon uses a graduated system, so each slice of your income is taxed at the rate for its bracket. Your first dollars are always taxed at 4.75 percent regardless of how much you earn overall. The Department of Revenue adjusts the lower thresholds each year for inflation, but the $125,000 threshold for the top rate is fixed by statute.¹

For tax year 2025 (the return you file in 2026), single filers pay:

4.75 percent on the first $4,400 of taxable income
6.75 percent on income between $4,400 and $11,100
8.75 percent on income between $11,100 and $125,000
9.9 percent on income above $125,000

For joint filers, heads of household, and qualifying surviving spouses, the first three thresholds roughly double: 4.75 percent on the first $8,800, 6.75 percent from $8,800 to $22,200, 8.75 percent from $22,200 to $250,000, and 9.9 percent on anything above $250,000.²

How Oregon Builds Your Taxable Income

The number those rates apply to isn’t your gross pay. Oregon starts with the federal adjusted gross income from your federal return, then requires specific additions and subtractions. Interest on municipal bonds from other states, for instance, gets added back in because Oregon taxes it even though the federal government doesn’t. Interest from U.S. government bonds gets subtracted, because states can’t tax it.

The Federal Tax Subtraction

Oregon is one of the few states that lets you subtract a portion of the federal income tax you paid. For 2025, most filers can subtract up to $8,500 in federal tax liability, or $4,250 if married filing separately. The subtraction phases out at higher incomes, shrinking starting at $125,000 of federal AGI for single filers and $250,000 for joint filers, and disappearing entirely at $145,000 and $290,000.³ For those who qualify, this meaningfully lowers the income that runs through the brackets.

Standard Deduction or Itemizing

Oregon’s standard deduction for 2025 is $2,835 for single or married-filing-separately, $5,670 for married filing jointly or qualifying surviving spouse, and $4,560 for head of household. Filers who were 65 or older by January 1, 2026, or legally blind at year end add $1,200 per condition for single and head-of-household filers, or $1,000 per condition for other statuses.⁴

You can itemize instead on Schedule OR-A. The rules mostly track federal itemization, but medical and dental expenses are deductible only above 7.5 percent of federal AGI.⁵ Some taxpayers who take the federal standard deduction still itemize on their Oregon return, because Oregon’s standard deduction is comparatively low.

Credits That Reduce What You Actually Owe

Credits come off your tax bill dollar for dollar after the rates have done their work, so they can change what you pay more than the brackets suggest.

Personal Exemption Credit

The personal exemption credit is $256 for each qualifying exemption on your return for 2025. It disappears entirely once federal AGI exceeds $100,000 for single filers or $200,000 for joint filers, heads of household, and qualifying surviving spouses.⁶

Oregon Kids Credit

Families with young children may qualify for up to $1,050 per child under age six at year end, for up to five children. The full credit is available with modified AGI of $26,550 or less, phases down from there, and reaches zero at $31,550.⁷ It’s refundable, so you get it even if you owe no tax.

529 Education Savings Credit

Contributions to an Oregon College Savings Plan account can yield a refundable credit of up to $360 for joint filers or $180 for single filers in 2025. Higher-income contributors need to deposit more to reach the maximum.⁶

Working Family Household and Dependent Care Credit

This credit helps offset child or dependent care costs. Eligibility depends on household size and AGI. A household of two must have AGI below $63,450, and a household of four must be below $96,450. The Department of Revenue provides an online calculator for the exact amount.⁸

Portland-Area Local Income Taxes

If you live in or around Portland, your total income tax rate is higher than the state brackets alone suggest. These local taxes are billed separately from your state return.

Metro Supportive Housing Services Tax

The Metro SHS tax is 1 percent on taxable income above $125,000 for individuals or $200,000 for joint filers, funding regional housing and homelessness programs. It’s marginal, so a joint-filing couple earning $225,000 would owe $250.⁹

Multnomah County Preschool for All Tax

Multnomah County adds 1.5 percent on single-filer taxable income over $125,000, and another 1.5 percent (3 percent total) on income above $250,000. For joint filers, the 1.5 percent rate starts at $200,000 and the 3 percent rate at $400,000.¹⁰ Stacked with the state’s 9.9 percent top rate and the Metro SHS tax, a high-earning Multnomah County resident can face a combined marginal rate well into the teens.

Portland Arts Tax

Portland residents age 18 and older with $1,000 or more in income owe a flat $35 Arts Education and Access Income Tax each year. It’s due April 15 with no extension. A $15 penalty applies the day after the deadline, and another $20 kicks in if the tax remains unpaid after six months.¹¹

The Oregon Kicker Credit

Oregon’s Constitution requires the state to return money to taxpayers whenever actual revenues exceed the original budget forecast by more than 2 percent during a two-year cycle. The entire surplus above the forecast, not just the amount over 2 percent, comes back as a refundable credit.

For 2025 returns filed in 2026, the kicker equals 9.863 percent of your 2024 Oregon personal income tax liability. If you owed $5,000 for 2024, your kicker credit on the 2025 return is about $493.¹² You have to file a state return to receive it, even if you wouldn’t otherwise be required to file.

Who Has to File

Full-year Oregon residents file Form OR-40 and owe tax on income from every source. A single full-year resident must file if gross income exceeds $7,935; the threshold is $15,865 for a married couple filing jointly.¹³ You count as a full-year resident if Oregon is your permanent home and the center of your financial and family life, or if you keep a home in Oregon and spend more than 200 days in the state during the year.¹⁴

Part-year residents file Form OR-40-P. Nonresidents with Oregon-source income, such as wages for work performed here, rental income from Oregon property, or business income earned in the state, file Form OR-40-N. Both are taxed only on Oregon-source income. If your W-2 doesn’t break out Oregon wages, you calculate them using the ratio of days worked in Oregon to total days worked.¹⁵

Deadlines, Payment, and Penalties

Oregon 2025 returns are due April 15, 2026.¹⁶ If you owe more than you can pay, the Department of Revenue offers payment plans up to 36 months through Revenue Online; longer plans require a financial condition statement with supporting documentation.¹⁷

Most full-year residents can file for free through Direct File Oregon, the state’s interview-based tool for original and amended Form OR-40 returns. Part-year residents, nonresidents, and fiscal-year filers aren’t eligible.¹⁸

Estimated Payments

If you expect to owe $1,000 or more after credits and withholding, which is common for the self-employed and those with significant investment income, you generally need quarterly estimated payments. For 2026, the due dates are April 15, June 15, September 15, and January 15, 2027.¹⁹ To avoid underpayment interest, pay at least 90 percent of your current-year tax or 100 percent of your prior-year tax, whichever is less.

Late Filing and Late Payment

Filing late and paying late are treated separately. If your return is more than three months past due (including any extension), Oregon adds a 20 percent penalty on unpaid tax. Fail to file for three consecutive years by the due date of the third year, and the penalty jumps to 100 percent of the unpaid tax.²⁰

Interest on unpaid tax accrues at 8 percent per year for periods beginning on or after January 1, 2026. If the balance stays unpaid more than 60 days after assessment, another 4 percent per year is added, bringing the annual rate to 12 percent. Interest applies to the tax only, not to penalties.²⁰

1
Oregon State Legislature. Oregon Code 316.037 – Imposition and Rate of Tax
2
Oregon Department of Revenue. 2025 Tax Tables for Form OR-40
3
Oregon Department of Revenue. 2025 Publication OR-17, Oregon Individual Income Tax Guide
4
National Finance Center. Oregon State Income Tax Withholding – System Documentation
5
Oregon Department of Revenue. 2025 Instructions for Schedule OR-A, Oregon Itemized Deductions
6
Oregon Department of Revenue. Tax Benefits for Families
7
Oregon Department of Revenue. Department of Revenue Offers Information to Help Taxpayers Claim Correct Oregon Kids Credit Amount
8
Oregon Department of Revenue. Working Family Household and Dependent Care Credit
9
Metro. Pay My Supportive Housing Services Taxes
10
Multnomah County. Multnomah County Preschool For All Personal Income Tax
11
Portland.gov. Arts Tax Filing and Payment Information
12
Oregon Department of Revenue. Fact Sheet – Oregons Surplus Revenue Kicker Credit
13
Oregon Department of Revenue. Do I Need to File
14
Oregon Department of Revenue. What Form Do I Use
15
Oregon Department of Revenue. 2025 Form OR-40-N and Form OR-40-P Instructions
16
Oregon Department of Revenue. Tax Calendar
17
Oregon Department of Revenue. Payment Plans
18
Oregon Department of Revenue. Direct File Oregon
19
Oregon Department of Revenue. Form OR-40-V Instructions
20
Oregon Department of Revenue. Penalties and Interest for Personal Income Tax