OREGON
Return to Retiree Tax Map
NICKNAME
The Beaver State
BOTTOM LINE: NOT TAX-FRIENDLY
Oregon's top rate of 9.9% is applied to taxable income over $125,000. Although Oregon does not tax Social Security benefits, most other retirement income is taxed at your top income-tax rate. However, you can deduct up to $5,950 of federal income taxes paid from your Oregon return, and there is a retirement-income credit for seniors with certain income restrictions. One bright spot in Oregon's tax picture is its lack of a sales tax. You can buy anything in the state and never pay a penny in sales taxes. There is a Senior Citizen Property Tax Deferral program, but income limits apply.
STATE SALES TAX
None.
INCOME-TAX RANGE
Low: 5% (on up to $3,100 of taxable income for single filers and $6,200 for married couples filing jointly)
High: 9.9% (on taxable income over $125,000 for single filers and $250,000 for married couples filing jointly
SOCIAL SECURITY
Benefits are not taxed.
EXEMPTIONS FOR OTHER RETIREMENT INCOME
New residents will find that their pension income, along with most other income, will be taxed by Oregon. The state does not tax Railroad Retirement benefits. Depending on your age and income, you may be entitled to a retirement-income credit on your Oregon return. The credit is the lesser of tax liability or 9% of taxable pension income. If you receive a U.S. government pension, you may be entitled to subtract part or all of that pension on your Oregon individual income tax return. Oregon allows residents to subtract their current year's federal income tax liability, after credits, up to $5,950, based on income and filing status.
PROPERTY TAXES
Property is assessed at 100% of market value. Counties assess properties and set tax rates. The maximum assessed value cannot increase by more than 3% on properties that have not undergone major improvement projects, such as an addition or subdivision.
Tax breaks for seniors: Homeowners 62 or older may delay paying property taxes based on certain income criteria. With the Senior Citizen Property Tax Deferral Program, the state pays the taxes to the county, maintains the account and charges 6% simple interest, which is also deferred. Taxes are owed when the taxpayer receiving the deferral dies, sells the property, no longer lives permanently on the property, or the property changes ownership. To qualify, the taxpayer must live on the property and have a total household income of less than $40,500 in 2012.
INHERITANCE AND ESTATE TAXES
In 2012, Oregon’s inheritance tax changed to an estate tax. The filing threshold of $1 million remains for deaths occurring on or after January 1, 2012. The maximum estate-tax rate is 16%.
Visit RetirementLiving.com for a complete rundown of taxes in Oregon.
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