Oregon retirement income tax (2026)

How Oregon taxes retirement income

Oregon taxes income in 4 brackets for a married couple filing jointly, from 4.75% to 9.9%; the top rate starts at $250,000 of taxable income^[1]. For the example couple below, the last dollar of taxable income falls in the 8.75% bracket.

Before the rate applies, the simulator subtracts a standard deduction of $5,800 on a joint return ($2,900 single). It applies no personal exemption.

Social Security benefits are exempt from Oregon income tax: none of the benefit enters the state base, as in 22 of the 24 states covered here that tax income.

The simulator applies no retirement-income exclusion in Oregon: IRA and 401(k) withdrawals and pensions are taxed like other income. Any narrower break in state law that the simulator does not apply is listed under “What this page leaves out”.

Long-term capital gains and qualified dividends are taxed as ordinary income, at the same rates.

For single filers the simulator halves the joint deduction and exemption but keeps the joint bracket widths. Where Oregon’s real single brackets are narrower, that understates a single filer’s tax.

Put together, the example couple below owes $4,105 in Oregon, the 23rd lowest of the 24 states covered here that tax income.

2026 brackets

Bracket thresholds are held at these values in every simulated year. The simulator does not index state amounts for inflation.

Worked example

A retired couple, both 67, filing jointly, with $48,000 of Social Security, $40,000 of IRA withdrawals and a $20,000 pension. The figures are computed when the page is built, by the same state-tax function the simulator runs.

The couple’s next $1,000 of IRA withdrawals would add $88 of Oregon tax.

A single retiree, 67, with half those amounts ($24,000 of Social Security, $20,000 of IRA withdrawals, a $10,000 pension) owes $1,733, 3.21% of gross income, against the couple’s 3.80%.

As IRA withdrawals rise

The same couple, with Social Security and the pension unchanged, taking more from their IRAs (a larger withdrawal, a required minimum distribution or a Roth conversion all count as distributions here):

Neighbouring states

The example couple’s state tax in Oregon and in the neighbouring states covered here, same income and ages:

Against Oregon, the couple would pay less in Washington (−$4,105), Nevada (−$4,105), California (−$3,370). With $200,000 of IRA withdrawals instead of $40,000, they would owe $18,105 in Oregon, against Washington ($0), Nevada ($0), California ($11,998).

What this page leaves out

What the simulator does and does not handle for Oregon, item by item^[1]:

• Tax year 2026 married filing jointly brackets (4.75%–9.9%).
• $5,800 married filing jointly standard deduction (single $2,900 = 50%; head of household is $4,650, not modeled separately).
• The $260/person exemption credit and federal-tax-liability subtraction (up to $8,750) are ignored.
• Social Security exempt.
• IRA/401(k) fully taxed (federal-pension subtraction and low-income retirement credit ignored).
• Gains ordinary.

In every state the simulator also leaves out credits, itemized deductions, deductions that phase out with income, local income taxes, surtaxes and any deduction for federal tax paid. It holds state amounts fixed and does not index them for inflation.

See it over a full plan

Related

• All 33 states compared
• State taxes in retirement: the exemptions that change the map
• The Social Security tax torpedo
• The RMD bomb: how pre-tax savings become forced income
• Roth ladder: how a Roth conversion ladder works
• Taxes in retirement: the topic guide
• Marginal-rate map (federal and state tax on the next dollar)