Updated October 5, 2026. Quick answer: Yes. Oregon taxes interest and dividends as ordinary income, and the guide says “Generally, interest income is only taxed by your state of residence.” The 2025 rates run from 4.75% to 9.9%. Interest on U.S. and Oregon bonds is subtracted and other states’ bond interest is added back.
How Oregon treats dividends and interest
| Item | What the documents say |
|---|---|
| Treatment | Taxed on the graduated schedule |
| 2025 rates (single) | “your tax is 4.75% of taxable income” up to $4,400, then 6.75%, 8.75% over $11,100, and 9.9% over $125,000 |
| Dividends | “Generally, dividend income is only taxed by your state of residence.” |
| Other states’ bonds | Add “bonds and notes of another state or political subdivision of another state” |
| Oregon bonds | Interest and dividends on obligations of the State of Oregon and of Oregon public bodies are subtracted under ORS 316.056 |
| U.S. obligations | “U.S. bonds and notes are exempt from state tax”; the guide adds that nothing can be subtracted when the U.S. government only guarantees the security |
A $20,000 example
Taxable dividends and interest of $20,000 taxed wholly at the lowest 2025 rate, 4.75%, would add $950; taxed wholly at 9.9%, $1,980. Your own figure depends on the bracket your total income puts it in.
What changes in 2026
The latest documents read print no 2026 change to the way dividends and interest are taxed.
Federal rules
The state’s treatment sits on top of the federal one. Qualified dividends and ordinary dividends are sorted out on the Form 1099-DIV, as the site explains in Box 1a and 1b: ordinary versus qualified dividends, and interest is reported as covered in 1099-INT Box 1. The IRS explains the federal side in Topic no. 403, Interest Received and Topic no. 404, Dividends.
Related: whether Oregon taxes capital gains, whether Oregon taxes pensions, how Oregon taxes retirement income, dividends and interest tax by state, and how tax-exempt interest is reported.
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Answer againSources
- Publication OR-17, Full-Year Resident Oregon Individual Income Tax Guide (2025, Rev. 01-29-26): https://www.oregon.gov/dor/forms/FormsPubs/publication-or-17_101-431_2025.pdf
- Oregon Revised Statutes Chapter 316, Personal Income Tax (ORS 316.056, 316.680): https://www.oregonlegislature.gov/bills_laws/ors/ors316.html
- 2025 Tax rate charts (Chart S and Chart J): https://www.oregon.gov/dor/programs/individuals/Documents/Part-year and nonresident tax rate charts.pdf
Sources: the primary documents linked above, read on October 5, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan administrator or the agency itself is the right place to confirm anything consequential.