State guides · OR

How Oregon taxes retirement income

Some 2026 figures pending confirmation  Tax year 2026 · research last updated October 2, 2026

At a glance

Tax rates

Brackets apply to Oregon taxable income. Other filing statuses are in the rules reference.

Social Security

Oregon doesn't tax Social Security benefits.

All Social Security and Tier 1 Railroad Retirement benefits included in federal AGI are subtracted.

Pensions, IRAs and 401(k)s

Roth conversions

A Roth conversion counts as taxable income for Oregon. Whether a retirement income exclusion can cover part of it depends on the rules above.

Capital gains

Taxed like other income, at the rates above. .

Credits and relief for older residents

• Retirement income credit (ORS 316.157, credit code 811). Age 62+ at end of year with taxable retirement income (state/local/private pensions, individual retirement plans (IRAs), employee annuities, deferred comp/401(k), federal pensions not subtracted). Worksheet: (1) net Oregon-taxable retirement income; (4) base $7,500 ($15,000 MFJ) minus total Social Security + Tier 1 RRB benefits (not below 0); (7-9) household income over $15,000 ($30,000 MFJ) reduces that; credit = 9% x smaller of net retirement income or the reduced base. Eligible only if household income < $22,500 ($45,000 MFJ), SS+RRB < $7,500 ($15,000), and household income + SS < $22,500 ($45,000). Household income includes nontaxable items and IRA conversions included in AGI. Nonrefundable, no carryforward. Amounts are fixed, not indexed. Practically only very low-income retirees qualify. Income limit: Household income < $22,500 single / $45,000 MFJ
• Personal exemption credit. See personalCreditRule ($263 per person, lost entirely above federal AGI $100,000 single / $200,000 MFJ). Income limit: Federal AGI <= $100,000 / $200,000

Local income taxes

Portland-area personal income taxes on Oregon taxable income (so they DO hit retirement income, IRA withdrawals and Roth conversions), filed with the City of Portland Revenue Division : (1) Metro Supportive Housing Services tax: 1% of Oregon/Metro taxable income over $125,000 single/MFS, $200,000 joint/HOH/QSS for TY2021-2025; indexed from TY2026: $128,000 / $205,000 (TY2026) and $132,000 / $211,000 (TY2027), for residents of the Metro district. (2) Multnomah County Preschool for All tax: 1.5% of taxable income over $125,000 / $200,000 plus an additional 1.5% over $250,000 / $400,000 for county residents (not indexed); 'The rate will increase by 0.8% in 2028' per the Revenue Division page. Not modeled by Taxtirement (no locality keys; see scheduled.json OR needsCode). Transit payroll taxes (TriMet, Lane Transit District, statewide transit tax 0.1%) apply only to wages/self-employment, not retirement income.

More detail from our research notes

Oregon has no age-based pension exclusion for private pensions or IRAs; everything except Social Security/RRB and pre-1991 federal service pension is taxable at up to 9.9%. The federal tax subtraction is significant for middle-income retirees (a Roth conversion that raises federal tax raises the subtraction up to the cap). The 'kicker' (surplus credit) is paid in odd-numbered years based on the prior year's tax and is ignored here as instructed. Oregon itemized deductions start from federal Schedule A with state income tax removed (the Oregon itemized total is subject to additions/limits in OR-17); itemize federal to itemize Oregon. Brackets (except top thresholds), standard deduction, exemption credit and federal tax subtraction cap are indexed; final 2026 values are published in the 2026 OR-17 (~Jan 2027). 65+/blind additional standard deduction: $1,000 per condition, $1,200 if unmarried and not a surviving spouse (ORS 316.695(7)); fixed in statute, not indexed (the (1)(c)(C) CPI recomputation covers only the basic standard deduction). Federal tax subtraction for married filing separately: 50% of the individual limit (ORS 316.695(3)(d)), so $4,375 for 2026. 2026 session: SB 1507 (ch. 142) updates the IRC connection date to Dec 31 2025 and adds back the federal car-loan interest deduction and IRC 1202 gain from TY2026; no retiree rate, deduction or credit change.

Pending confirmation

These points were still being confirmed against Oregon's published 2026 forms when this page was built. Most are waiting on forms the state publishes around the turn of the year.

4 items

• All 2026 figures are Oregon DOR ESTIMATES: OR-ESTIMATE (Rev. 10-07-25) gives standard deduction $2,900 / HOH $4,650 / MFJ $5,800, exemption credit $260, federal tax subtraction up to $8,750; 2026 OR-W-4 instructions (Rev. 02-17-26) give HOH $4,700; 2026 withholding formulas (Rev. 12-31-25) use $2,910 single / $5,820 married standard deduction and a $263 exemption credit. Values used here: $2,910 / $5,820 / $2,910 / $4,685 standard deduction and $263 exemption credit -- the statutory recomputations. ORS 316.695(1)(c)(B)-(C) : base $1,640 single/MFS, $3,280 MFJ, $2,640 HOH x (Sep 2024-Aug 2025 CPI-U average 319.205 / Q2 2002 average 179.833 = 1.77500), increase rounded down to $5 -> 2,910 / 5,820 / 4,685 (HOH 2,640 x 1.77500 = 4,686.01 -> 4,685); the same formula reproduces 2025's printed $2,835 / $5,670 / $4,560 , and the 2026 withholding formulas print $2,910 / $5,820. No 2026 DOR document prints the exact HOH figure ($4,650 OR-ESTIMATE, $4,700 OR-W-4 are rounded estimates). Exemption credit: see personalCreditRule. Source of the corrections: pe-triage/west.md OR-2, OR-3. Confirm with the 2026 OR-17 / OR-40 instructions (DOR posts them about Dec 2026-Jan 2027: https://www.oregon.gov/dor/forms/Pages/default.aspx).
• 2026 bracket thresholds (4,550/11,400 single; 9,100/22,800 joint) are the DOR OR-ESTIMATE rate charts; ORS 316.037(1)(b)-(c) indexes them (CPI Sep-Aug vs Q2 1992), top thresholds fixed. Final figures in the 2026 OR-40 instructions (Dec 2026-Jan 2027).
• 2026 Schedule OR-A: the federal SALT cap (with the phase-down) and the § 68 limit applied in proportion are taken from ORS 316.695(1)(d); confirm on the 2026 form.
• Special Oregon medical subtraction: household medical costs are split evenly between the people on the return; single/separate Table 11 bands read from a garbled extraction ($25,000/$50,000/$100,001).

Sources

Every figure comes from these documents, mostly the state's own forms, instructions and statutes.

1. 2026 rate charts S and J, estimated 2026 standard deduction, exemption credit ($260), federal tax subtraction ($0-$8,750), 2026 worked examplehttps://www.oregon.gov/dor/forms/FormsPubs/publication-or-estimate_101-026_2026.pdf
2. 2026 OR-W-4 instructions: estimated 2026 standard deduction $2,900 / $4,700 HOH / $5,800; additional amount $1,000 married / $1,200 othershttps://www.oregon.gov/dor/forms/FormsPubs/form-or-W-4-instr_101-402-1_2026.pdf
3. 2026 withholding formulas: federal tax subtraction phase-out steps ($8,750 cap), brackets, $2,910/$5,820 standard deduction and $263 credit used for withholdinghttps://www.oregon.gov/dor/forms/FormsPubs/withholding-tax-formulas_206-436_2026.pdf
4. 2025 Publication OR-17: Social Security subtraction, federal tax liability subtraction Table 9, retirement income credit worksheet and household income rules, exemption credit AGI cliffs, standard deduction and 65+ add-on, federal pension subtractionhttps://www.oregon.gov/dor/forms/FormsPubs/publication-or-17_101-431_2025.pdf
5. ORS 316.695(3)(d) (MFS federal tax limit 50%) and (7) (65+/blind $1,000 / $1,200, no indexing)https://oregon.public.law/statutes/ors_316.695
6. City of Portland Revenue Division, SHS and PFA personal income tax: Metro thresholds $128,000/$205,000 (2026), $132,000/$211,000 (2027); PFA 1.5% + 1.5%, +0.8% in 2028https://www.portland.gov/revenue/personal-tax
7. SB 1507 (2026) enrolled, Oregon Laws 2026 ch. 142: IRC connection date Dec 31 2025; car-loan interest and IRC 1202 addbacks from TY2026; ORS 316.157 connection date onlyhttps://olis.oregonlegislature.gov/liz/2026R1/Downloads/MeasureDocument/SB1507/Enrolled

Taxtirement's Oregon calculation is also checked against a second, independent implementation on 1,000 random households. How we check our numbers.

This page summarizes Oregon's 2026 rules as Taxtirement applies them, for education and planning. It isn't tax advice, and it doesn't cover every situation (for example part-year residents, businesses or military-only provisions). Rules change; check the state's current instructions, or a tax professional, before you act. Spotted something wrong? Tell us.