Updated October 7, 2026. Quick answer: Only if you live there. Oregon’s own guide says “Oregon doesn’t tax your retirement income if you are a nonresident” who is not domiciled in Oregon, while most retirement income is taxed when an Oregon resident receives it.
How Oregon treats a pension earned elsewhere
| Item | What the state documents say |
|---|---|
| Nonresidents | Oregon does not tax retirement income of a nonresident who is not domiciled in Oregon. A nonresident who is still domiciled in Oregon owes Oregon tax on Oregon source retirement income, including public pensions, corporate plans and IRAs. This rests on the Retirement income section of Publication OR-17 and the Form OR-40-N instructions. |
| Residents with a pension earned elsewhere | An Oregon resident is taxed on all income, including income from outside the state, and most retirement income is subject to Oregon tax even if it was earned while a nonresident. A U.S. government pension for service before October 1, 1991 can be subtracted in whole or in part, and a filer age 62 or older may qualify for a retirement income credit. The source says: “Most retirement income is subject to Oregon tax”. This rests on Publication OR-17 and the resident Form OR-40 instructions. |
| Part-year residents (year of a move) | A part-year resident files Form OR-40-P. Oregon taxes income from all sources earned or received while an Oregon resident, plus Oregon source income while a nonresident, and retirement income received after becoming a nonresident is taxed only if the person stays domiciled in Oregon. The source says: “from all sources earned or received while you were an Oregon resident”. This rests on Publication OR-17 and the OR-40-N and OR-40-P instructions. |
| Rate | Oregon prints a graduated schedule for 2025 with marginal rates of 4.75%, 6.75%, 8.75% and 9.9%. The top rate of 9.9% applies to taxable income over $125,000 for single filers. The source says: “the tax rate chart for your filing status”. The lowest bracket rate rests on Publication OR-17 because the Form OR-40 instructions print only a dollar tax table below $50,000. |
| Return to file | Full-year residents file Form OR-40. Part-year residents file Form OR-40-P, and nonresidents file Form OR-40-N. The source says: “Use Form OR-40-P if any ONE of the following is true”. |
A $40,000 move-year example
A retiree receives $40,000 of pension in the year of a move: $20,000 before the move date, as an Oregon resident, and $20,000 after leaving.
The first $20,000 can be taxed by Oregon; the rest is outside its reach under the federal rule below. Taxed wholly at the lowest printed rate, 4.75%, the tax on it is computed as $20,000 x 0.0475 = $950; taxed wholly at the highest, 9.9%, it is computed as $20,000 x 0.099 = $1,980. The real figure falls between these bounds before any exclusion or credit. Federal tax still applies.
The federal rule that protects a nonresident
4 U.S.C. 114(a) bars a state income tax on retirement income of an individual “who is not a resident or domiciliary of such State”. Retirement income means any income from a qualified retirement plan, a simplified employee pension, a 403(a) or 403(b) plan, an individual retirement plan, an eligible 457 plan or a governmental plan. Income from a nonqualified deferred compensation plan counts only if it is part of a “series of substantially equal periodic payments” made for life or for a period of at least 10 years, or is a payment after termination of employment from a plan that exists only to provide benefits above the Internal Revenue Code limits, so not every payment is covered. Retired pay of a member of a uniform service is also covered.
Related: how Oregon taxes retirement income, whether Oregon taxes pensions, Oregon to Arizona retirement taxes, Oregon to Florida retirement taxes, out-of-state pension tax by state, and deferred compensation lump sums after a move.
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Answer againSources
- 2025 Publication OR-17, Oregon Individual Income Tax Guide (Oregon Department of Revenue): https://www.oregon.gov/dor/forms/FormsPubs/publication-or-17_101-431_2025.pdf
- 2025 Form OR-40 Instructions (Oregon Department of Revenue): https://www.oregon.gov/dor/forms/FormsPubs/form-or-40-inst_101-040-1_2025.pdf
- 2025 Form OR-40-N and Form OR-40-P Instructions (Oregon Department of Revenue): https://www.oregon.gov/dor/forms/FormsPubs/form-or-40-n_or-40-p-inst_101-048-1_2025.pdf
- 4 U.S.C. 114, Limitation on State income taxation of certain pension income (U.S. Government Publishing Office, 2023 edition): https://www.govinfo.gov/content/pkg/USCODE-2023-title4/html/USCODE-2023-title4-chap4-sec114.htm
Sources: the primary documents linked above, read on October 7, 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.