State retirement taxes · 2026
Does Oregon tax retirement income?
Short answer: Yes — everything except Social Security. Oregon does not tax Social Security benefits. Only the pre-October 1991 share of federal pensions is exempt; a 9% credit helps low-income retirees 62+.
What’s taxed in Oregon
2026 rules.
- Social SecurityNot taxed
- Oregon does not tax Social Security benefits.
- PensionsTaxed
- Private and state or local pensions are fully taxable; federal pensions are partly exempt for service before October 1, 1991.
- IRA & 401(k) withdrawalsTaxed
- IRA and 401(k) withdrawals are fully taxable.
- Military retirement payPartly taxed
- Military retirement pay is taxable except the share earned before October 1, 1991, which is subtracted like other federal pensions.
- Income tax rate9.9% top
- Four brackets: 4.75%, 6.75%, 8.75% and 9.9%.
Does Oregon tax Social Security?
Oregon does not tax Social Security benefits.
Oregon doesn’t tax any Social Security, Railroad Retirement Board or railroad unemployment benefits.
Your federal return is a separate question — see how much of your benefit the IRS taxes with the taxable Social Security calculator.
Are pensions taxed in Oregon?
Private and state or local pensions are fully taxable; federal pensions are partly exempt for service before October 1, 1991.
Federal pensions (including military) get a subtraction in proportion to service or points earned before October 1, 1991 — 100% if all service was before that date, 0% if all after. Low-income retirees 62+ may get the Retirement Income Credit.
Public vs. private pensions: Private and state/local pensions: taxed. Federal pensions: exempt for the pre-October 1991 share.
Are IRA and 401(k) withdrawals taxed in Oregon?
IRA and 401(k) withdrawals are fully taxable.
They can count toward the low-income Retirement Income Credit at 62+.
Required minimum distributions (RMDs) are IRA and 401(k) withdrawals, so the same rules apply. Estimate your RMD.
Is military retirement pay taxed in Oregon?
Military retirement pay is taxable except the share earned before October 1, 1991, which is subtracted like other federal pensions.
What is Oregon’s income tax rate?
4 brackets, topping out at 9.9%.
Four brackets: 4.75%, 6.75%, 8.75% and 9.9%. In 2026 the 8.75% rate starts at about $11,400 of taxable income single ($22,800 joint, estimated), and 9.9% applies above $125,000 ($250,000 joint).
2026 brackets. Each rate applies to taxable income above the amount shown.
| Single | Married, joint | Rate |
|---|---|---|
| $0 | $0 | 4.75% |
| $4,550 | $9,100 | 6.75% |
| $11,400 | $22,800 | 8.75% |
| $125,000 | $250,000 | 9.9% |
2026 thresholds are Department of Revenue estimates; final figures come with the 2026 forms.
Standard deduction and exemptions
Standard deduction for 2025: $2,835 single, $5,670 joint, $4,560 head of household; 2026 estimates are $2,900 / $5,800 / $4,650. Add $1,200 (single or head of household) or $1,000 (others) per 65+/blind box (2025). Personal exemption credit: $256 each for 2025 (about $260 estimated for 2026), not allowed above $100,000 of federal AGI ($200,000 joint).
What tax breaks do seniors get in Oregon?
The extra standard deduction at 65+. The Retirement Income Credit at 62+: 9% of eligible retirement income if household income is under $22,500 ($45,000 joint) and Social Security is under $7,500 ($15,000 joint). The federal income tax subtraction: up to $8,500 for 2025 (about $8,750 estimated for 2026), phased out between $125,000 and $145,000 of federal AGI ($250,000–$290,000 joint).
What changed for 2026?
No rate change enacted. 2025 returns included the surplus “kicker” credit. Final 2026 indexed figures arrive with the 2026 forms (around January 2027). Oregon starts from federal AGI, so the federal $6,000 senior deduction does not carry over.
2026 brackets and standard deduction are Department of Revenue estimates; retirement rules come from the 2025 OR-17 and OR-40 instructions.
What we couldn’t confirm
- Oregon’s 2026 brackets, standard deduction, exemption credit and federal tax subtraction are the Department’s estimates until the 2026 forms are released.
- We could not check Oregon’s 2026 short session for retirement changes.
How Oregon compares with its neighbors
Thinking of moving across the line? Here’s how each bordering state treats retirement income in 2026.
- OregonThis pageLess friendlySocial Security Not taxedTop rate: 9.9% top
- CaliforniaLess friendlySocial Security Not taxedTop rate: 12.3% top
- IdahoMixedSocial Security Not taxedTop rate: 5.3% flat
- NevadaTax-free retirement incomeSocial Security Not taxedTop rate: None
- WashingtonTax-free retirement incomeSocial Security Not taxedTop rate: None
State tax is half the picture — check the federal side
Oregon retirement tax questions
Is Oregon tax-friendly for retirees?
We rate Oregon “Less friendly” for 2026. Oregon does not tax Social Security benefits. Only the pre-October 1991 share of federal pensions is exempt; a 9% credit helps low-income retirees 62+. The top income tax rate is 9.9%.
Are required minimum distributions (RMDs) taxed in Oregon?
RMDs are withdrawals from IRAs and 401(k)-type plans, so they follow Oregon’s rules for those accounts. IRA and 401(k) withdrawals are fully taxable.
Is military retirement pay taxed in Oregon?
Partly. Military retirement pay is taxable except the share earned before October 1, 1991, which is subtracted like other federal pensions.
What is Oregon’s income tax rate for 2026?
Four brackets: 4.75%, 6.75%, 8.75% and 9.9%. In 2026 the 8.75% rate starts at about $11,400 of taxable income single ($22,800 joint, estimated), and 9.9% applies above $125,000 ($250,000 joint).
Sources for Oregon
Primary sources only. We re-check them whenever an agency publishes new figures.
- State
- State
- State
- State
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