Oregon and Federal Tax Brackets: Rates, Deductions, and Deadlines

For the 2026 tax year, Oregon and federal tax brackets work on parallel but very different scales. The federal system runs seven brackets from 10% to 37%. Oregon runs four brackets from 4.75% to 9.9%, and its top rate kicks in at a much lower income level than the federal top rate. Both systems are progressive, meaning a higher rate only applies to the dollars that fall inside that bracket, not to your whole income. Where each bracket begins depends on your filing status.

2026 Federal Tax Brackets by Filing Status

The federal brackets were adjusted upward for 2026, largely because of changes made by the One, Big, Beautiful Bill Act. The bottom two brackets moved up by roughly 4%; the higher brackets moved up by about 2.3%.¹

Single Filers

10%: up to $12,400
12%: $12,401 to $50,400
22%: $50,401 to $105,700
24%: $105,701 to $201,775
32%: $201,776 to $256,225
35%: $256,226 to $640,600
37%: over $640,600

Married Filing Jointly

10%: up to $24,800
12%: $24,801 to $100,800
22%: $100,801 to $211,400
24%: $211,401 to $403,550
32%: $403,551 to $512,450
35%: $512,451 to $768,700
37%: over $768,700

The joint brackets are roughly double the single amounts through the middle of the schedule. Two incomes get taxed as if they were one income measured against wider bands.

Head of Household

10%: up to $17,700
12%: $17,701 to $67,450
22%: $67,451 to $105,700
24%: $105,701 to $201,775
32%: $201,776 to $256,200
35%: $256,201 to $640,600
37%: over $640,600

Head of household is available to unmarried taxpayers who pay more than half the cost of maintaining a home for a qualifying dependent. The biggest advantage over single filing shows up in the 12% bracket, which stretches to $67,450 instead of $50,400.

Married Filing Separately

The married-filing-separately brackets mirror the single-filer amounts through the 32% bracket. The 35% bracket then ends at $384,350, and the 37% rate begins above that. Filing separately rarely saves federal tax, but it can make sense when one spouse has significant medical expenses, student loan issues, or liability concerns.

2026 Oregon Tax Brackets by Filing Status

Oregon’s four rates are 4.75%, 6.75%, 8.75%, and 9.9%.² The 4.75% and 6.75% brackets each cover narrow bands at the bottom of the schedule. The 8.75% bracket absorbs the bulk of most people’s earnings. The 9.9% top rate applies above a fixed threshold.

For single filers and married filers filing separately, the 9.9% rate begins at $125,000 of Oregon taxable income. For married couples filing jointly and for heads of household, it begins at $250,000. The lower bracket thresholds are adjusted for inflation each year by the Oregon Department of Revenue; the top-bracket threshold has stayed fixed. For the current dollar breakpoints on the three lower brackets, use the rate charts published with the Form OR-40 instructions.³

The 9.9% rate applies to more income than many taxpayers expect. A single filer with $175,000 of Oregon taxable income pays 9.9% on $50,000 of it. Combined with federal tax, a high-earning Oregonian can face a marginal rate above 46% on top dollars.

Getting to Taxable Income

The brackets apply to taxable income, not gross income. Two adjustments dominate the gap between what you earn and what the brackets touch.

Standard Deductions

The federal standard deduction for 2026 is $16,100 for single filers, $32,200 for married couples filing jointly, and $24,150 for heads of household.¹

Oregon’s standard deduction is far smaller: $2,910 for single filers claiming two or fewer allowances, and $5,820 for married filers or single filers claiming three or more allowances. The gap means your Oregon taxable income will almost always be higher than your federal taxable income. Someone with $60,000 in gross income who takes both standard deductions has about $43,900 in federal taxable income but roughly $57,090 in Oregon taxable income.

Oregon’s Federal Tax Subtraction

Oregon partially offsets the double-tax burden by letting you subtract a portion of the federal income tax you paid during the year from your Oregon taxable income. Most states allow no such deduction.⁴

For the 2025 tax year, the most recent published figures, the maximum subtraction is $8,500 for most filers and $4,250 for married filing separately. It phases out based on federal adjusted gross income:

Single filers: full $8,500 up to $125,000 AGI, phasing to zero at $145,000
Joint filers, head of household, and qualifying surviving spouses: full $8,500 up to $250,000 AGI, phasing to zero at $290,000
Married filing separately: full $4,250 up to $125,000 AGI, phasing to zero at $145,000

The cap and phase-out thresholds are adjusted each year. Check the current Form OR-40 instructions for the 2026 figures when they become available.⁵ The subtraction uses your total federal tax liability after credits. Social Security and Medicare payroll taxes don’t count, and neither does any earned income credit that reduced your federal bill. For someone in the 9.9% bracket, the full $8,500 subtraction is worth roughly $840.

One Extra Oregon Tax the Brackets Don’t Cover

Oregon imposes a statewide transit tax of 0.1% on wages. It sits outside the regular income tax and the bracket schedule, and it has no exemption threshold, so every dollar of wages is taxed. Oregon residents owe it regardless of where they work, and nonresidents owe it on wages earned in Oregon. Employers withhold it from paychecks; self-employed individuals report and pay it on their own returns.⁶ On $75,000 of wages the tax comes to $75.

Filing Deadlines and Late Penalties

Federal and Oregon returns for the 2025 tax year are both due April 15, 2026. Oregon’s deadline always matches the federal deadline. An extension moves the filing date to October 15 but does not move the payment date. Any tax owed is still due April 15, and penalties begin the next day.⁷

The federal failure-to-file penalty is 5% of unpaid tax per month, capped at 25%. The failure-to-pay penalty is a separate 0.5% per month, also capped at 25%. When both apply in the same month, the failure-to-file penalty is reduced by the failure-to-pay amount. File on time even if you can’t pay the full balance; filing late costs ten times more per month than paying late.⁸⁹

Oregon charges a flat 5% late-payment penalty on any state tax unpaid by the original due date, even if you filed an extension. If you file more than three months past the due date (including any extension), a 20% late-filing penalty stacks on top, bringing the combined penalty to 25% of unpaid tax. Oregon also charges 8% annual interest on unpaid balances for 2026, plus an additional 4% per year on tax that stays unpaid more than 60 days after assessment.¹⁰

1
Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
2
Oregon Revised Statutes. Oregon Code 316.037 – Imposition and Rate of Tax
3
Oregon Department of Revenue. Personal Income Tax
4
Oregon Revised Statutes. Oregon Code 316.685 – Federal Income Tax Deductions
5
Oregon Department of Revenue. 2025 Form OR-40 Instructions
6
Oregon Department of Revenue. Statewide Transit Tax
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Oregon Department of Revenue. Final Countdown – Tax Filing Deadline Is Wednesday
8
Internal Revenue Service. Failure to File Penalty
9
Office of the Law Revision Counsel. 26 USC 6651 – Failure to File Tax Return or to Pay Tax
10
Oregon Department of Revenue. Penalties and Interest for Personal Income Tax