Oregon income tax rates run through four brackets: 4.75%, 6.75%, 8.75%, and a top rate of 9.9%. That top rate is one of the highest state marginal rates in the country, and Oregon leans on it hard because there is no general sales tax to share the load.1Oregon Department of Revenue. Sales Tax in Oregon What you actually owe depends on where your income lands in the brackets, what Oregon lets you subtract before applying the rate, and whether you live or work in the Portland metro area, where two local income taxes stack on top of the state bill.
How the Four Brackets Work
Oregon’s structure under ORS 316.037 is progressive, so each rate applies only to the income inside its bracket, not to your whole paycheck. The four tiers for every filing status are:
- 4.75% on the lowest tier of taxable income
- 6.75% on the next tier
- 8.75% on income up to $125,000 for single filers or $250,000 for joint filers
- 9.9% on every dollar above $125,000 single or $250,000 joint
The thresholds between the first three brackets are adjusted each year for inflation using the Consumer Price Index. The $125,000 and $250,000 cutoffs for the top rate are fixed by statute and never move.2Oregon Public Law. Oregon Code 316.037 – Imposition and Rate of Tax Over time, inflation quietly pushes more taxpayers into the 9.9% bracket.
A single filer with $80,000 in Oregon taxable income pays 4.75% on the first slice, 6.75% on the next, and 8.75% on the rest up to $80,000. Nothing hits 9.9% because nothing crosses $125,000. The Department of Revenue publishes updated tax tables each year with the exact inflation-adjusted thresholds, and those tables are the cleanest way to work out a specific bill.3Oregon Department of Revenue. Personal Income Tax
What Oregon Taxes Before the Rate Applies
Oregon starts with your federal taxable income and then runs its own adjustments. Two of them meaningfully shrink what the rate hits.
Federal Tax Subtraction
Oregon is one of the few states that lets you subtract a portion of the federal income tax you paid. For the 2026 tax year the maximum subtraction is $8,500 for both single and joint filers.4Oregon Department of Revenue. 2025 Publication OR-17 Oregon Individual Income Tax Guide The subtraction phases out at higher incomes and disappears entirely above $125,000 single or $250,000 joint. Below those lines, it is one of the larger adjustments available on an Oregon return.
Social Security and Other Subtractions
Oregon does not tax Social Security benefits. Any Social Security income included in your federal adjusted gross income comes out on the Oregon return.4Oregon Department of Revenue. 2025 Publication OR-17 Oregon Individual Income Tax Guide Interest on out-of-state municipal bonds has to be added back, and certain federal pension income earned before October 1, 1991 can be subtracted.5Oregon Public Law. Oregon Code 316.680 – Modification of Taxable Income Two households with identical federal returns can end up with very different Oregon bills depending on where their income comes from.
Standard Deduction
Oregon’s standard deduction is much smaller than the federal one. For 2024 it was $2,745 single and $5,495 joint, with annual inflation adjustments. If you itemize federally, you will generally itemize on your Oregon return too, though the allowed deductions differ slightly between the two.
Credits That Lower the Final Bill
Oregon offers credits that come off your tax directly rather than reducing taxable income. Two are worth knowing for most filers.
The Oregon Earned Income Credit equals 9% of your federal Earned Income Tax Credit, rising to 12% if you have a dependent younger than three at the end of the tax year. Oregon also extends this credit to filers who use an Individual Taxpayer Identification Number, which the federal version does not.6Oregon Department of Revenue. Tax Benefits for Families
The personal exemption credit is modest, starting at a base of $90 per exemption and adjusted each year for inflation the same way the brackets are.7Oregon Public Law. Oregon Code 316.085 – Personal Exemption Credit For a family with several dependents the credit adds up.
Local Income Taxes in the Portland Metro Area
If you live or work in the Portland region, the state rate is only part of the picture. Two local income taxes stack on top and can add several percentage points for higher earners.
Metro Supportive Housing Services Tax
The Metro Supportive Housing Services (SHS) tax charges 1% on taxable income above $125,000 single or $200,000 joint. It funds housing and homelessness programs across Clackamas, Multnomah, and Washington counties and is set to expire in 2030. Starting in 2026 the income thresholds adjust annually for inflation.8Metro. Supportive Housing Services Funding
Multnomah County Preschool for All Tax
Multnomah County adds its own Preschool for All (PFA) tax with two tiers:
- 1.5% on taxable income above $125,000 single or $200,000 joint
- An additional 1.5% (3% total) on income above $250,000 single or $400,000 joint
On January 1, 2027 both tiers increase by 0.8 percentage points, raising the rates to 2.3% and 3.8%. For 2026 the current rates still apply.9Multnomah County. Multnomah County Preschool for All Personal Income Tax Both the SHS and PFA taxes are filed through the City of Portland’s Revenue Division, not with your state return.10Portland.gov. Personal Income Tax Filing and Payment Information
What the Combined Rate Looks Like
A single filer in Multnomah County earning $300,000 in 2026 pays 9.9% state tax on income above $125,000, 1% SHS on income above $125,000, and 3% PFA on income above $250,000. The combined marginal rate on the top slice reaches 13.9%. Few places in the country produce a state-and-local combination that high, and it surprises a lot of Portland-area residents.
Statewide Transit Tax
Every Oregon worker also pays a Statewide Transit Tax of 0.1% on wages, withheld automatically by employers. The legislature passed a rate increase to 0.2% for 2026, but a voter referendum (Initiative Petition 302) was certified in December 2025, so the original 0.1% rate stays in effect pending the election.11Oregon Department of Revenue. Statewide Transit Tax
The Oregon Kicker
Oregon has a refund mechanism no other state uses. When actual state revenue beats the forecast by more than 2% over a two-year budget cycle, the full surplus goes back to taxpayers as a credit on the next return. Oregonians call it the kicker.
The kicker only shows up in odd-numbered tax years. For the 2025 tax year, filed during the 2026 season, the credit equals 9.863% of your 2024 Oregon income tax liability before credits. To claim it you must have filed a 2024 Oregon return showing tax owed, and you must file a 2025 return even if you otherwise would not have to.12Oregon Department of Revenue. Oregon Surplus Kicker There is no kicker for the 2026 tax year itself because 2026 is even-numbered. Former Oregon residents who have since moved out of state remain eligible as long as they file the required return.
Who Actually Owes Oregon Tax
How Oregon classifies your connection to the state controls what income the rates apply to.
Full-year residents owe Oregon tax on all income no matter where it was earned, including wages from remote work for an out-of-state employer, investment income, and rent from property elsewhere. Oregon generally grants a credit for taxes paid to another state on the same income, which prevents true double taxation in most situations.
You can also become an Oregon resident without meaning to. Keeping a home in Oregon and spending more than 200 days in the state during the tax year makes you a statutory resident, with Oregon tax applied to your worldwide income.13Oregon Department of Revenue. What Form Do I Use People with vacation homes or who split time between Oregon and Washington get caught by this rule often.
Part-year residents who moved into or out of Oregon during the year pay tax on income earned while they were residents, plus any Oregon-sourced income earned during the nonresident portion. Nonresidents who never lived in Oregon but earn income from Oregon sources, such as commuters from Washington, owe tax only on that Oregon-sourced income. A narrow exception treats technically-Oregon residents as nonresidents if they kept a permanent home outside the state all year, kept no home in Oregon, and spent fewer than 31 days in the state.13Oregon Department of Revenue. What Form Do I Use