Part-year residents and nonresidents must file if their total income exceeds the federal filing threshold and they have any income from Oregon sources. Oregon’s personal income tax is a primary source of state revenue, applied to income individuals earn or receive within the state. The amount of tax owed depends on a taxpayer’s financial situation, including their residency status and total income. Employers and https://renacpower.net/accounting-basics-assets-liabilities-equity-3/ payroll departments should ensure that withholding reflects the correct rates and brackets for 2025.

Can’t pay it all?

• Be sure to check the Oregon Department of Revenue’s website for the most up-to-date information on filing deadlines.
• In addition to federal taxes, Oregon taxpayers have to pay state taxes.
• However, the owners or members of the corporation must report their share of the corporation’s income on their personal tax returns and pay Oregon and federal income tax.
• In Oregon, different tax brackets are applicable to different filing types.
• Oregon’s state income tax rates and brackets for 2025 remain a central concern for residents, newcomers, and anyone considering a move to the state.
• The lack of a general sales tax means that income tax is the primary state tax burden, making it essential for residents, immigrants, and newcomers to understand their obligations.
• This means that taxpayers can expect the same structure as in recent years, with the top marginal rate of 9.9% applying to higher earners.

Taxpayers in Multnomah County, which is home to Portland, also pay the Preschool For All Personal Income Tax. For single filers, this is a 1.5% tax on income above $125,000 and 3% on income above $250,000. Married couples filing jointly pay 1.5% on income above $200,000 and 3% on income above $400,000. When you consider not just income taxes, but all the taxes collected by state and local governments, the tax structure turns upside-down.

Other things to know about Oregon taxes

• Oregon offers several tax credits that directly reduce the tax you owe.
• The speed and accuracy of computers allow electronic returns to be received and processed faster than paper returns, greatly reducing errors and delays.
• The state uses a four-bracket progressive state income tax, which means that higher income levels correspond to higher state income tax rates.
• The federal corporate tax’s brackets differ from the personal income tax in that the brackets are not completely progressive (the last tax bracket is not the highest).
• Tax Day will arrive a month later than usual this year, another consequence of the COVID-19 pandemic.
• Like the excise tax, this form can be filed electronically via the Revenue Online system or by mail.
• You may file either of the taxpayer authorization forms through Revenue Online or submit a paper form.

The 2025 tax rates and thresholds for both the Oregon State Tax Tables and Federal Tax Tables are comprehensively integrated into the Oregon Tax Calculator for 2025. This tool is freely available and is designed to help you accurately estimate your 2026 tax return. Adding these amounts together, the individual would pay a total of $32,643.69 in Oregon state income taxes for 2025. Remember, hiring a tax professional is an investment in ensuring your tax return is filed correctly and maximizing your tax benefits. Be sure to discuss fees and services upfront before engaging their services. We’ll also explore Oregon’s deductions and credits, including the popular Oregon’s Earned Income Tax Credit (EITC) and the Working Family Child and Dependent Care Credit.

Oregon Income Tax Table

Direct File Oregon is a way to electronically file your personal income tax return with the Oregon Department of Revenue. Direct File Oregon is an interview-based software that allows most full year residents to file Form OR-40 original and amended returns through Revenue Online for free. Oregon’s state income tax rates for 2025 are structured into four brackets, with rates that increase as income rises.

What is the Federal Income Tax?

The current corporate tax rates have been in effect since 1994 (unlike the federal income tax brackets, which are updated yearly for inflation). Oregon requires all residents, part-year residents, and nonresidents with income from Oregon sources to file a state income tax return if their gross income exceeds the state’s threshold. The primary form used is Form OR-40 for residents, OR-40-P for part-year residents, and OR-40-N for nonresidents. These returns can be filed electronically through the Oregon Department of Revenue’s Revenue Online system or by mail.

• Oregon requires all residents, part-year residents, and nonresidents with income from Oregon sources to file a state income tax return if their gross income exceeds the state’s threshold.
• Corporations without employees must also register to report compensation paid to corporate officers.
• The form can be submitted by mail to the Oregon Department of Revenue.
• Oregondoesn’t tax Social Security or Railroad Retirement Board benefits.
• Executors or personal representatives must file Form OR-706 to report and pay this tax.
• TurboTax makes it simple to maximize your refund and keep more of what you’ve earned.

Your 2024 Federal Income Tax Comparison

Oregon offers a range of tax credits to help reduce what you owe and keep more money in your pocket. Here’s a quick look at some of the most common credits and how they work. If your state tax witholdings are greater then the amount of income tax you owe the state of Oregon, you will receive an income tax refund check from the government to make up the difference. The two most popular tax software packages are H&R Block At Home, sold by the H&R Block tax preparation company, and TurboTax Federal & State, sold by the Intuit software company.

These reductions lower your gross income to arrive at your Oregon taxable income. To calculate your income tax, you need to determine which bracket your income falls into and apply the corresponding tax rate. For example, if your taxable income is $50,000, you would pay 4.75% on the first $3,550, 6.75% on the amount between $3,551 and $8,900, and so on. It’s important to note that Oregon does not tax Social Security benefits.

New residents should update their withholding forms to avoid surprises at tax time. This means that taxpayers can expect the same structure as in recent years, with the top marginal rate of 9.9% applying to higher earners. The lack of a general sales tax balance sheet in Oregon means that income tax remains the primary source of state revenue, making it especially important for residents to understand their obligations. To e-file your Oregon and Federal income tax returns, you need a piece of tax software that is certified for eFile by the IRS. While most in-depth tax software charges a fee, there are several free options available through the states, and simple versions are also offered free of charge by most tax software companies. The Tax tables below include the tax rates, thresholds and allowances included in the Oregon Tax Calculator 2025.

With the 2025 tax year approaching, it’s important to understand what has changed, who is affected, and what actions are required for both current and future taxpayers. S-Corporations and other flow-through entities aren’t subject to the double taxation of revenue imposed on a C-Corp, because they aren’t required to pay corporate taxes on their revenue. However, the owners or members of the corporation must report their oregon state income taxes share of the corporation’s income on their personal tax returns and pay Oregon and federal income tax.