Retiring in Oregon: how your income is taxed
Oregon is less tax-friendly for retirees. On a typical retirement income it ranks #51 of 51 for the lowest state income tax.
The rules in Oregon
- Social Security: Oregon fully subtracts Social Security and Railroad Retirement benefits, with no income limit.
- Pensions: Private pensions are taxed at Oregon's regular rates. Federal pensions (civil service and military): only the share earned from service before October 1, 1991 can be subtracted. The 9% retirement income credit (62 and older, low incomes only) can't be claimed for tax years starting on or after January 1, 2026.
- 401(k), 403(b) and IRA withdrawals: 401(k) and IRA withdrawals are taxed at Oregon's regular rates. The small 9% retirement income credit, which could apply to this income, ended after tax year 2025.
- At 65 and older: Filers 65 or older add $1,200 to the standard deduction ($1,000 per spouse on a joint return). Oregon doesn't allow the federal senior deduction.
Calculate your Oregon retirement taxes
State income tax in Oregon: $2,179 a year
In Oregon, the 401(k)/IRA amount counts as IRA withdrawals, which don't qualify for the pension exclusion. Enter withdrawals from employer plans such as a 401(k) or 403(b) as pension.
In Oregon you'd pay about $2,179 in state income tax and $4,336 in federal income tax on $70,000 of retirement income, keeping $63,485 (9.3% total).
Oregon ranks #51 of 51 for the lowest state tax on this income. 19 states charge no state income tax on this income.
What retirees pay in Oregon
| Retirement income | State tax (single) | State tax (married) | Federal tax (single) |
|---|---|---|---|
| $24,000 Social Security, $12,000 401(k)/IRA | $179 | $0 | $0 |
| $30,000 Social Security, $20,000 pension, $20,000 401(k)/IRA | $2,179 | $1,583 | $4,336 |
| $40,000 Social Security, $40,000 pension, $50,000 401(k)/IRA, $10,000 other income | $7,043 | $6,136 | $19,812 |
Age 67 or older, 2026 rules including the federal senior deduction. For married couples, income is the household total and both spouses are 67 or older. State estimates apply Oregon's main exclusions and may differ for income-tested credits.
States with lower retirement taxes
Moving to Oregon in retirement?
Compare the tax on your Social Security, pension and 401(k)/IRA income, and typical living costs, with the state you'd leave. These are the states most households moving to Oregon come from (IRS migration data, 2022–2023).
- California to Oregon
- Washington to Oregon
- Texas to Oregon
- Arizona to Oregon
- Idaho to Oregon
- Colorado to Oregon
Frequently asked questions
Does Oregon tax Social Security?
Not taxed. Oregon fully subtracts Social Security and Railroad Retirement benefits, with no income limit.
Does Oregon tax pensions?
Taxed. Private pensions are taxed at Oregon's regular rates. Federal pensions (civil service and military): only the share earned from service before October 1, 1991 can be subtracted. The 9% retirement income credit (62 and older, low incomes only) can't be claimed for tax years starting on or after January 1, 2026.
Does Oregon tax 401(k) and IRA withdrawals?
Taxed. 401(k) and IRA withdrawals are taxed at Oregon's regular rates. The small 9% retirement income credit, which could apply to this income, ended after tax year 2025.
Is Oregon a good state to retire for taxes?
For a single retiree with $30,000 Social Security, $20,000 pension, $20,000 401(k)/IRA, Oregon charges about $2,179 in state income tax, ranking #51 of 51 (lowest tax first).
Related
Sources: oregon.gov, oregon.gov (2), olis.oregonlegislature.gov, oregon.public.law. Rules reviewed . Some 2026 amounts were not yet published or sources differed; confirm with the state revenue department.