Some of these colonies also taxed “faculties” of making income in ways other than farming, assessed by the same people who assessed property. Most states tax capital gain and dividend income in the same manner as other investment income. In this respect, individuals and corporations not resident in the state generally are not required to pay any income tax to that state with respect to such income. Gross income generally includes all income earned or received from whatever source with some exceptions.

Overview of Oregon Taxes

Portland has the highest combined local income tax rate in the nation (4 percent), adding an extra layer of tax burden for residents of the state’s largest city. In the following table, we provide the most up-to-date data available on state does oregon have state income tax individual income tax rates, brackets, standard deductions, and personal exemptions for both single and joint filers. In the following tables, we have compiled the most up-to-date data available on state individual income tax rates, brackets, standard deductions, and personal exemptions for both single and joint filers. Following the tables, we document notable individual income tax changes implemented in 2024. In addition to federal taxes, Oregon taxpayers have to pay state taxes. The state uses a four-bracket progressive state income tax, which means that higher income levels correspond to higher state income tax rates.

State Individual Income Tax Rates and Brackets, 2021

Capital gains in Oregon are subject to the normal personal income tax rates. That means capital gains can be taxed at a rate as high as 9.9%, depending on your total income. Any such amount will have a tax rate of 5 percent instead of 3 percent. Any such amount of Connecticut taxable income to which, as provided in the preceding sentence, the 3 percent tax rate does not apply shall be an amount to which the 5 percent tax rate shall apply. Like most states with income tax, it is calculated on a marginal scale, with four (4) tax brackets. The highest bracket of 9.90% starts for income greater than $110K.

Standard deduction

(ll) For taxpayers with federal AGI that exceeds $150,000, the taxpayer will pay the greater of state income tax or 3 percent of federal AGI. (s) Connecticut’s personal exemption phases out by $1,000 for each $1,000, or fraction thereof, by which a single filer’s Connecticut AGI exceeds $30,000 and a MFJ filer’s Connecticut AGI exceeds $48,000. (j) Connecticut and New York have “tax benefit recapture,” by which many high-income taxpayers pay their top tax rate on all income, not just on amounts above the benefit threshold. 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.

• Starting in January of 2022, Multnomah County employers are required to withhold the tax through payroll deductions for employees who earn more than $200,000 annually or for employees who opt into having the tax withheld.
• A filing extension allows you an extension of time to file your return but not an extension of time to pay your tax.
• We believe everyone should be able to make financial decisions with confidence.
• In a state without a sales tax, it operates somewhat like an embedded sales tax for major retailers.
• Most states do not tax Social Security benefits or interest income from obligations of that state.
• Oregon’s tax system ranks 30th overall on the 2025 State Tax Competitiveness Index.

Oregon Tax Tables 2022 – Tax Rates and Thresholds in Oregon

(n) State provides a state-defined personal exemption amount for each exemption available and/or deductible under the Internal Revenue Code. Under the Tax Cuts and Jobs Act, the personal exemption is set at $0 until 2026 but not eliminated. Because it is still available, these state-defined personal exemptions remain available in some states but are set to $0 in other states. 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.

• The Revenue Division does not allow an extension of time to pay your tax.
• For individuals, the income tax rates on ordinary income (as distinguished from capital gains) start at 10% and increase up to 37% as your income tax bracket increases.
• If you were Black, mixed-race, Hawaiian, or Chinese, you had to pay a tax not levied on white Oregonians.
• 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.
• Whether you’re a longtime resident or new to the Beaver State, getting familiar with the basics can make filing your taxes smoother.
• If an employer cannot file electronically, they may request permission to use an alternate filing method by contacting the Revenue Division.

This reduces the taxable income for the year, potentially leading to lower tax liabilities. Additionally, the funds in these retirement accounts grow tax-deferred, meaning that taxes on investment gains are cash flow not paid until the money is withdrawn during retirement, ideally at a lower tax rate. The current tax structure was shaped by the Student Success Act (House Bill 3427), passed in 2019.

For example, say you want to withhold an additional $25 each month. Write $25 on the line of the W-4 that asks how much of an additional withholding you want to be taken from your paycheck. While this will result in slightly less money per paycheck, it could save you money come tax time. 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.

Oregon Tax Rates

• Check the “Extension Filed” box when you file your personal income tax return(s) and attach a copy of your federal extension or verification of your Oregon extension payment with your return.
• The Oregon Constitution requires the state to send, or “kick,” unanticipated tax revenue back to tax filers if revenue comes in 2 percent or more above what state economists forecast two years prior.
• Chris Hutchison helped build NerdWallet’s editorial operation and has directed coverage across banking, investing, taxes and insurance.
• Oregon offers a range of tax credits to help reduce what you owe and keep more money in your pocket.
• Individual income taxes are a major source of state government revenue, accounting for 38 percent of state tax collections.

For all taxpayers with AGI of $20,000 or less and claiming a dependent, the dependent exemption is $1,000. This amount is reduced to $500 per dependent for taxpayers with AGI above $20,000 and equal to or less than $100,000. For taxpayers with more than $100,000 in AGI, the dependent exemption is $300 per dependent. (b) These states allow some or all of federal income tax paid to be deducted from state taxable income. In some states, a large number of brackets are clustered within a narrow income band. For example, Georgia’s taxpayers reach the state’s sixth and highest bracket at $7,000 in taxable income.

When Bookkeeping vs. Accounting big corporations avoid taxes, it means either that there are fewer resources for schools and other essential services or that someone else — families and small businesses — foots the bill through higher taxes. Not only do they have individual and business taxes, but they also have gross margins tax and additional payroll taxes in certain jurisdictions. They are also one of the few states that also has an estate tax. Quarterly underpayment interest will be due if estimated payments were required and were underpaid. Estimated payments can be made through quarterly estimated payments, employer-provided withholding from a filer’s wages, or a combination of both.