2026 edition · statute-cited · part of Clear Money Guide’s 51-state retirement tax series. This guide covers state taxes on retirement income and estate transfers; property and sales taxes vary by county and are outside its scope.
Updated July 24, 2026. Quick answer: On income, mostly no; at death, emphatically no — unless your estate is small or your assets are a family farm. Oregon exempts Social Security (ORS 316.054) but taxes pensions, 401(k) and IRA withdrawals as ordinary income at 4.75% to 9.9% — and its estate tax starts at $1,000,000, the lowest threshold in the nation, fixed and never indexed, with rates of 10–16% above it and no spousal portability. New for 2026: the low-income retirement credit is gone — it may not be claimed for tax years beginning on or after January 1, 2026.
The credit that just expired (2026 correction)
Oregon’s retirement income credit (ORS 316.157 — age 62+, roughly 9%, household income under $22,500/$45,000) sunset: it cannot be claimed for tax years beginning on or after January 1, 2026, and no enacted extension was found this session. Guides listing it among Oregon’s retiree benefits are now describing a dead provision. The one surviving subtraction of note: federal pension income attributable to service before October 1, 1991 is fully subtractable (prorated for mixed service) — valuable for long-retired federal employees, irrelevant to most others. There is no general pension or 401(k)/IRA exclusion, and no blanket military exemption — military retirement gets only the same pre-1991 federal-service subtraction.
How Oregon taxes retirement income (statute-cited)
| Income tax | Graduated, 4.75% to 9.9% top rate |
| Social Security | Not taxed (ORS 316.054 subtraction) |
| Pension / 401(k) / IRA | Fully taxable as ordinary income; federal pensions: pre-Oct. 1, 1991 service portion subtractable; retirement income credit expired for TY2026+ |
| Military retirement | No blanket exemption — same pre-1991 federal-service subtraction only |
| Estate tax | Yes — $1,000,000 threshold (fixed, not indexed), rates 10–16%, no portability (ORS 118.010) |
| Inheritance tax | None |
The $1 million estate tax (lowest threshold in the nation)
Oregon’s estate tax reaches further down than any other state’s: the $1,000,000 filing threshold has been fixed — never indexed — while home values tripled, so an ordinary Portland house plus a 401(k) now clears it. Rates run 10% to 16% on the amount above $1M (ORS 118.010), and there is no spousal portability — an unused exemption dies with the first spouse, which is why credit-shelter planning still matters here. Repeated bills and initiatives to raise the threshold have failed. Two corrections: the “0.8%–16%” rate tables still circulating describe pre-2012 law, and for family farms, forestland and fisheries, an exemption of up to $15,000,000 of qualifying natural-resource property (ORS 118.145, created by 2023’s SB 498 for deaths on or after July 1, 2023; claimed on Schedule OR-NRE) can be subtracted from the taxable estate — provided the family held the property for five years before death and continues owning and materially participating for five years after. It cannot be combined with the older, narrower ORS 118.140 credit (Schedule OR-NRC) — guides calling SB 498 a “$15M credit” are conflating the two provisions. Full table: estate tax by state.
Probate: a statutory schedule, and a two-part affidavit test
Oregon’s personal-representative compensation is statutory (ORS 116.173): 7% of the first $1,000; 4% from $1,000 to $10,000; 3% from $10,000 to $50,000; 2% above $50,000 — plus 1% of certain non-probate property (life insurance excluded); attorney fees are reasonable (ORS 116.183). The small-estate lane is a two-part test: a simple estate affidavit is available when personal property is at most $75,000 and real property at most $200,000 (ORS 114.510; renamed “simple estate” by 2023’s SB 308). Context: probate cost by state · small-estate limits by state · will vs. trust calculator.
The verdict for 2026
Oregon asks retirees to pay twice: ordinary-income rates to 9.9% on withdrawals while living, then 10–16% above a $1M line at death — a line an unremarkable homeowner now crosses. No sales tax softens the picture for spenders, and Social Security rides free. But for anyone with a paid-off home plus retirement accounts, the estate threshold — not the income tax — is the number that should drive planning, and next-door Washington (no income tax, higher estate exclusion) or Nevada (neither) make the comparison pointed.
Oregon vs. common alternatives
| State | Social Security | Pension / 401(k) / IRA | Estate tax | Inheritance tax |
|---|---|---|---|---|
| Oregon | Not taxed | Fully taxable (4.75–9.9%) | Yes — $1M threshold, 10–16% | None |
| Washington | Not taxed | Not taxed (no income tax) | Yes — $3M exclusion, top rate 35% | None |
| California | Not taxed | Fully taxable as ordinary income (to 13.3%) | None | None |
| Nevada | Not taxed | Not taxed (no income tax) | None | None |
Comparison rows summarize general rules; see our 51-state retirement tax table for statute-cited detail.
Considering a Roth conversion? The converted amount is taxed as ordinary income in the year you convert, and Oregon may treat it differently from the retirement income above — see how all 51 jurisdictions tax Roth conversions.
Finding a financial advisor in Oregon
Per the SEC’s July 2026 Investment Adviser roster, Oregon has 156 SEC-registered advisory firms (#23 nationally) managing $219.3 billion (#32 by AUM). Full breakdown: Oregon advisor statistics. Reviewing fee structures: fee-drag calculator.
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Thinking about moving?
Four taxes change when you move state in retirement, not one: income tax on withdrawals, state estate tax, state inheritance tax, and what probate costs your heirs. Corridor comparisons involving Oregon:
Leaving Oregon? See leaving Oregon in retirement.
Compare any two states with the retirement tax comparison tool, or browse all corridors at the relocation hub.
What probate costs in Oregon
Oregon uses a hybrid standard — a statutory ceiling or floor with reasonableness applied inside it — so the fee has a bound but not a fixed number. Its small-estate route of $75,000 can reach real property under the statutory cap — unusual, and worth confirming against the property’s value. Full detail with the governing statute, the court filing fee and the threshold: Oregon probate cost. To price a specific estate, use the probate cost calculator.
Cite or share this guide
Suggested citation: Clear Money Guide, “Oregon Retirement Taxes (2026 edition),” statute-cited; clearmoneyguide.com/oregon-retirement-taxes/. Free to cite with attribution and a link. Data verified July 23–24, 2026 against state statutes, session laws, and revenue-department guidance.
Primary sources
- https://oregon.public.law/statutes/ors_316.157
- https://www.taxact.com/support/1513/oregon-federal-pension-exclusion-before-october-1-1991
- https://www.oregon.gov/dor/forms/FormsPubs/publication-or-pit-vet_101-009.pdf
- https://www.oregon.gov/dor/programs/gov-research/Documents/Oregon%20Estate%20Transfer%20Tax%20Return%20Statistics%20Secured-UA.pdf
- https://taxfoundation.org/data/all/state/estate-inheritance-taxes/
- https://oregon.public.law/statutes/ors_116.173
- https://oregon.public.law/statutes/ors_114.510
- https://www.courts.oregon.gov/Documents/2025_CircuitFeeSchedule_public_eff-2025-01-01.pdf
- https://olis.oregonlegislature.gov/liz/2023R1/Measures/Overview/SB498
- https://oregon.public.law/statutes/ors_118.145
- https://www.oregon.gov/dor/forms/FormsPubs/form-or-706-inst_104-001-1_2025.pdf