Nonresidents can multiply the total amount available to an Oregon resident by their Oregon percentage, which determines the modifications, deductions, and tax credits available to them. Typically, it’s found by dividing income in the Oregon column of your tax return after subtractions by your income in the federal column of your tax return after subtractions. Those with an Oregon 529 College Savings Plan had a carry forward option available until December 31, 2019, and can still carry forward any unused subtraction before that date until 2023. Oregon was one of the first Western states to adopt a state income tax, enacting its current tax in 1930.

The additional tax on income earned above $1 million is the state’s 1% mental health services tax. Using your income information, we’ll look for any tax credits that will either impact your refund or the amount you owe, as well as deductions to lower your taxable income. While most small businesses are not C corporations, and few LLCs elect to be treated as corporations, this tax is important to understand since small businesses often grow into traditional corporations over time. And because the price of most tax software packages includes preparation and filing for only one state, filing multiple state income tax returns often means paying extra. But if you want to raise tax rates on the rich and big corporations to fund schools or other essential services, then you need three-fifths of each chamber of the legislature to agree.

Taxes & rates

To learn more about how your state income tax rates work, visit the website of your state’s taxation and revenue department, or the Federation of Tax Administrators. All filers can get their tax using the personal income tax calculator instead of using the tax rate charts or tables in the return instructions. Form OR-40-P filers will need to multiply the tax by their Oregon percentage on their return. Beyond federal income taxes, your employer will also withhold Social Security and Medicare taxes from each of your paychecks. Social Security tax is withheld at 6.2% and Medicare tax at 1.45% of your wages.

Taxpayers who are self-employed will have to pay the entire Social Security and Medicare contributions themselves. If you fall into this camp, make sure that during tax season you look into possible deductions to help recoup the money you spend on the “employer” portion of FICA taxes. For help filing your taxes and maximizing your deductions, consider working with a financial advisor who specializes in taxes. Starting Jan. 1, 2020, you may request a refund of the state portion of retail sales tax (6.5%) that you paid on eligible purchases in the prior year. See our Qualified Nonresident refund page for more information.

File

Though Oregon tax law is no longer explicitly racist, it continues to entrench and even deepen racial disparities that are the result of past and present policy choices. From Jesus to Adam Smith, there is wide agreement that a fair tax system is one based on the ability to pay — oregon income tax rate one that asks proportionately more of a rich person than of a poor person. Taxes pay to educate our children, to care for our seniors, and for many other services that we alone cannot shoulder. DonateAs a 501(c)(3) nonprofit, we depend on the generosity of individuals like you.

• While the personal income tax is based on a taxpayer’s ability to pay, Oregonians pay other taxes not connected to how much someone can afford to pay.
• Find out how income taxes in retirement stack up in all 50 states plus the District of Columbia.
• State income tax is imposed at a fixed or graduated rate on taxable income of individuals, corporations, and certain estates and trusts.
• States with an income tax require employers to withhold state income tax on wages earned within the state.
• Louisiana taxes some retirement income, but there is an income exclusion of up to $6,000 for retirees age 65 and older.
• The state of Oregon requires you to pay taxes if you’re a resident or nonresident that receives income from an Oregon source.

View how much tax you may pay in other states based on the filing status and state entered above. If you’re a physician who’s licensed in the state of Oregon and provides care to at least eight residents at an Oregon Veterans Home (OVH), you can qualify for a tax credit that’s  worth up to $5,000. Another way you can alter your paycheck is to change your contributions to employer-sponsored retirement or medical expense accounts.

Oregon Tax Credits

Hawaii exempts some retirement income, but income tax rates are on the high end for retirement income that is taxable. The estate tax exemption is $5.49 million in Hawaii, and estates that exceed the exemption are taxed between 10% and 20%. When you consider not just income taxes, but all the taxes collected by state and local governments, the tax structure turns upside-down. While the personal income tax is based on a taxpayer’s ability to pay, Oregonians pay other taxes not connected to how much someone can afford to pay. They include property taxes and excise taxes on things like gasoline, alcohol, and tobacco.

In 1862, not long after joining the Union, Oregon enacted a tax on people of color. If you were Black, mixed-race, Hawaiian, or Chinese, you had to pay a tax not levied on white Oregonians. If you couldn’t afford it, you paid it off by performing road work.