State-by-State Guide to Taxes on Retirees
Tool | December 2020

Oregon State Tax Guide for Retirees

State tax rates and rules for income, sales, property, estate, and other taxes that impact retirees.

Oregon

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The Bottom Line
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Mixed Tax Picture

Oregon doesn't tax Social Security benefits, which certainly helps retirees lower their income tax bill. But, in most cases, other retirement income is subject to tax—and Oregon's income tax rates can be as high as 9.9%. However, there is a retirement-income credit for seniors, but it comes with certain income restrictions.

One bright spot in Oregon's tax picture is its absence of a sales tax. You can buy anything in the state and never pay a penny in sales taxes.

When it comes to property taxes, Oregon's median property tax rate is a little below the national average. There's also a property tax deferral program for senior citizens, but income limits do apply.

Income Tax Range

Low: 4.75% (on up to $3,600 of taxable income for single filers and up to $7,200 for married couples filing jointly)

High: 9.9% (on taxable income over $125,000 for single filers and over $250,000 for married couples filing jointly)

A "kicker" tax credit is available for the 2021 tax year (the credit is possible only in odd-numbered years), because actual state revenues exceeded forecasted revenues by 2% or more over the two-year budget cycle. For 2021, the credit is equal to 17.341% of your 2020 Oregon tax liability before any credits.

Counties and special districts can also impose local income taxes.

Taxation of Social Security Benefits

Social Security benefits are not taxed by the state.

Tax Breaks for Other Retirement Income

Income from federal government retirement plans for work or points earned before October 1, 1991, is exempt.

In addition, Oregon allows residents to deduct payments from an IRA, Keogh plan, SEP plan, and certain government plans if another state has already taxed contributions to the plan made while the taxpayer was a nonresident.

Taxpayers age 62 and older may also qualify for a tax credit equal to the lesser of their Oregon tax liability or 9% of taxable retirement income, depending on the amount of their household income, Social Security benefits and Railroad Retirement benefits.

Railroad Retirement benefits are fully exempt.

Sales Tax

No state or local sales tax.

Real Property Taxes

In Oregon, the median property tax rate is $903 per $100,000 of assessed home value.

Homeowners 62 and older may delay paying property taxes through the Property Tax Deferral for Disabled and Senior Citizens program. Among other requirements, you must live on the property, have a total household income of less than $46,500 (for 2021), have a net worth of less than $500,000, and you home can't be worth more than $250,000. A claim for an initial year of deferral, or for continued deferral, may not be filed on or after December 2, 2032, and deferral may not be granted for a property tax year beginning after July 1, 2032.

Annual Car Taxes and Fees

No annual vehicle tax or fee is imposed.

Estate and Inheritance Taxes

Oregon has an estate tax for estates valued at $1 million or more. Rates range from 10% to 16%.

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