Oregon Income Tax Calculator

How to Use This Oregon Income Tax Calculator

This Oregon income tax calculator estimates your annual state and federal tax liability for 2025 and 2026. Enter your gross income, filing status, and any pre-tax deductions, then select your locality in the dropdown if you live or work in the Portland Metro area or Multnomah County. Results show your Oregon state tax, local taxes, federal tax, FICA, and estimated net annual income.

For a per-paycheck breakdown, use the Oregon paycheck calculator. To compare Oregon with other states, use the general income tax calculator.

How Oregon State Income Tax Works

Oregon uses a four-bracket progressive income tax that has remained largely stable in recent years. The top rate of 9.9% applies to income above $125,000 (single) or $250,000 (joint) — one of the highest top rates in the country.

Oregon starts with federal adjusted gross income (AGI) and then applies state-specific adjustments:

1. Start with federal AGI — wages, self-employment, interest, dividends, and other income.
2. Apply Oregon additions/subtractions — for example, federal tax paid was historically deductible (eliminated in 2012); certain military pay is excluded.
3. Subtract the Oregon standard deduction— $2,745 (single) / $5,495 (joint). Oregon's standard deduction is much smaller than the federal amount.
4. Apply the progressive brackets — 4.75% through 9.9% depending on Oregon taxable income.
5. Subtract the personal exemption credit — $236 per filer directly reduces the tax owed (not taxable income).

Portland Metro and Multnomah County Local Taxes

If you live or work in the Portland metropolitan area, two local income taxes may apply:

Portland Metro Supportive Housing Services (SHS) Tax

Enacted in 2021, the SHS tax funds homelessness services. The rate is 1% on Oregon AGI above $125,000 for single filers (or above $200,000 for joint filers). The tax uses Oregon AGI as its base — meaning it is calculated before the standard deduction, so more income is exposed than the state brackets suggest. Employers began mandatory withholding in 2023.

Multnomah County Preschool for All (PFA) Tax

The Multnomah County PFA tax has two rates on Oregon AGI: 1.5% on income above $125,000 (single) / $200,000 (joint), and 3% on income above $250,000 (single) / $400,000 (joint). The combined maximum rate for a high-earning Multnomah County resident subject to both taxes is 4.5% in local income tax on income above $250,000 (single), layered on top of the 9.9% Oregon state rate.

FICA Taxes — Social Security and Medicare

FICA is federal and applies to every Oregon income earner:

• Social Security: 6.2% on wages up to $176,100 (2025) or $184,500 (2026). No further withholding once you hit the wage base.
• Medicare: 1.45% on all wages with no cap.
• Additional Medicare: 0.9% on wages above $200,000 (single) or $250,000 (married jointly) — employee only, no employer match.

Step-by-Step Example — $130,000 Multnomah County Single Filer (2026)

1. Gross wages: $130,000
2. Federal standard deduction: −$16,100 → federal taxable income: $113,900. Federal income tax: ~$19,850.
3. FICA: 7.65% × $130,000 (capped) = $9,945.
4. Oregon taxable income: $130,000 − $2,745 = $127,255. Oregon tax: 4.75% × $4,550 + 6.75% × $6,850 + 8.75% × $113,600 + 9.9% × $2,255 = ~$10,664.
5. Portland Metro SHS tax: 1% × ($130,000 − $125,000) = $50.
6. Multnomah County PFA tax: 1.5% × ($130,000 − $125,000) = $75.
7. Total taxes: $19,850 + $9,945 + $10,664 + $50 + $75 = $40,584
8. Annual net income: $130,000 − $40,584 = $89,416

How to Reduce Your Oregon Annual Tax Liability

• Maximize traditional 401(k) contributions— the 2026 limit is $23,500 ($31,000 if 50+). At Oregon's 8.75% bracket + 22% federal, every $1,000 contributed saves about $309.50 in combined state+federal income tax.
• Traditional IRA contributions — up to $7,000 ($8,000 age 50+) if eligible. For earners near the $125,000 SHS/Multnomah threshold, IRA contributions can reduce Oregon AGI below the local tax trigger, saving the full local tax on that income.
• Health Savings Account (HSA) — $4,300 individual / $8,550 family in 2026. Reduces Oregon taxable income and avoids FICA when contributed through payroll.
• Oregon College Savings Plan (529) — contributions are deductible from Oregon taxable income up to $150 (single) / $300 (joint) per year — a small but real state tax benefit.
• Review your withholding annually — the Portland Metro and Multnomah County taxes require separate estimated payments or employer withholding. Failure to withhold or pay estimated taxes results in underpayment penalties. Use the Oregon paycheck calculator to verify your per-check withholding matches your annual liability.

Retirement Income and Oregon Taxes

Oregon taxes most retirement income at the same progressive rates that apply to wages — 4.75% through 9.9% depending on income. Oregon is generally considered a less retiree-friendly state for income taxes compared to states like Pennsylvania or Illinois.

• Social Security: Oregon taxes Social Security benefits that are taxable at the federal level using the same income inclusion calculation. Oregon does not provide a separate state exemption for Social Security income, though retirees with very low total income may fall in the lower brackets or below the standard deduction threshold.
• Federal pension income (CSRS/FERS): Income from federal civilian retirement plans is deductible from Oregon taxable income up to $6,250 per taxpayer ($12,500 for MFJ). This deduction is available to retired federal employees receiving benefits from the Civil Service Retirement System (CSRS) or the Federal Employees Retirement System (FERS).
• Oregon PERS (Public Employees Retirement System): Oregon PERS income has a complex tax history. PERS benefits attributable to employee contributions made before October 1, 1991 (when contributions were not deductible from Oregon taxes) may be partly exempt. PERS benefits earned after that date are generally fully taxable. Oregon PERS members should consult their PERS member guide for their specific tax calculation.
• Private pensions, 401(k), and IRA distributions: Fully taxable in Oregon at the same progressive bracket rates as wages. A $50,000 retirement distribution for a single filer is taxed at Oregon rates starting at 4.75% — and potentially at 8.75% if combined income is above $11,400.
• Military retirement pay: Military retirement pay is fully taxable in Oregon. Oregon provides no exemption for military retirement income.

Oregon Form OR-40 (the resident individual income tax return) is due April 15. Oregon also accepts the same federal extension (Form 4868 or Oregon Form OR-40-V for payments), but any balance due must be paid by April 15.

Oregon Tax Credits and Deductions

Oregon offers several notable credits and deductions that can reduce annual state income tax liability:

• Oregon Earned Income Credit:Oregon provides a state Earned Income Credit for lower-income workers. The credit is calculated as a percentage of the federal Earned Income Tax Credit and is refundable for many filers. Oregon's credit is designed to mirror the federal EITC's structure, phasing in and out based on earned income and family size.
• Federal income tax deduction (unique to Oregon): Oregon is one of only a few states that allows taxpayers to deduct federal income taxes paid from Oregon taxable income. This is a rare and valuable deduction — most states do not offer it. The deduction is capped at $7,050 for single filers ($14,100 for MFJ) for 2026 and is claimed on Schedule OR-A. For a filer in the 22% federal bracket paying $15,000 in federal tax, the deductible amount (capped at $7,050) saves 8.75% × $7,050 = $617 in Oregon state tax. This deduction phases out at higher incomes.
• Oregon College Savings Plan (529) deduction: Contributions to an Oregon 529 Plan are deductible up to $150 per year for single filers ($300 for MFJ). While modest, this reduces Oregon taxable income at your marginal rate.
• Retirement income credit (federal pension): The $6,250 ($12,500 MFJ) deduction for federal pension income described above effectively functions as a targeted income exclusion for CSRS/FERS retirees.
• Political contribution credit: Oregon provides a credit of up to $50 (single) / $100 (MFJ) for contributions to Oregon political parties or candidates — a small but real dollar-for-dollar credit against state tax.

Tax Disclaimer

This calculator provides estimates for informational purposes only. It is not tax advice. Oregon state brackets, Portland Metro SHS thresholds, Multnomah County PFA rates, and federal rules change annually. Consult a qualified Oregon-licensed CPA or tax professional for your specific situation.