Oregon Retirement Taxes 2026: 9.9% Rate, $1M Estate Tax

The credit that just expired (2026 correction)

How Oregon taxes retirement income (statute-cited)

The $1 million estate tax (lowest threshold in the nation)

Probate: a statutory schedule, and a two-part affidavit test

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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. Oregon also keeps a retirement income credit for filers age 62 or older with low household income. Under ORS 316.157 as amended by 2025’s HB 2087, a credit may not be claimed for tax years beginning on or after January 1, 2032.

More state retirement-income schedules, line by line: Oregon federal pension subtraction.

Inherited an IRA? What the state’s own documents say about taxing those withdrawals: Oregon tax on inherited IRA withdrawals.

Hold a 403(b) or 457(b)? What the state’s own documents say about taxing those withdrawals: does Oregon tax 403(b) and 457(b) withdrawals.

Drawing a pension? Whether the state withholds tax from it, from its own documents: Oregon tax withholding on pension payments.

Married, or planning for a spouse’s death? Whether the state is a community property state, from its own statutes: Is Oregon a community property state?.

Selling your home? How the state taxes the profit, from its own tax documents: Does Oregon tax the profit from selling your home?.

The state’s income tax schedule: the Oregon tax brackets for 2026.

Before the tax question, the Portland Fire and Police Disability and Retirement fund rules, from the fund’s own documents: Portland FPDR retirement decisions.

For a pension earned elsewhere or paid after you move: does Oregon tax out-of-state pensions.

Withdrawing from an IRA or 401(k)? Whether the state withholds tax from it, from its own documents: Oregon tax withholding on IRA and 401(k) withdrawals.

Taking money out of your TSP? How the state taxes it, from its own tax documents: Does Oregon tax TSP withdrawals?.

Looking ahead to 2027? The state’s estate tax exemption for deaths in 2027, from its own tax documents: Oregon estate tax exemption 2027.

Inheriting from, or planning for, someone in this state? Whether the state has an inheritance tax, from its own tax documents: Does Oregon have an inheritance tax?.

For trust income specifically: does Oregon tax trust income.

For dividends and interest specifically: does Oregon tax dividends and interest.

Contributing to an HSA? How the state taxes it, from its own tax documents: Does Oregon tax HSA contributions?.

Making a gift or planning an estate? The state’s gift tax answer, from its own tax documents: Does Oregon have a gift tax?.

For annuity payments specifically: does Oregon tax annuity income.

Saving for a child’s college? The state’s 529 break has its own page: Oregon 529 plan tax deduction.

For military retired pay: does Oregon tax military retirement.

For the sale of stocks, funds or real estate: does Oregon tax capital gains.

For 401(k) and IRA withdrawals specifically: does Oregon tax 401(k) and IRA withdrawals.

More on Oregon: Is a Living Trust Worth It in Oregon?

Related state retirement tax guides: Does Oregon Tax Roth Conversions? 2026 and Oregon to Georgia Retirement Taxes.

The retirement income credit that still applies

Oregon’s retirement income credit (ORS 316.157) equals the lesser of your tax liability or nine percent of net pension income, for filers who receive pension income and are 62 or older by the end of the tax year. The Department of Revenue says you may qualify if annual household income is less than $22,500 ($45,000 on a joint return) and you receive less than $7,500 ($15,000 on a joint return) in Social Security and Tier 1 Railroad Retirement benefits. A credit may not be claimed under ORS 316.157 for tax years beginning on or after January 1, 2032, so the January 1, 2026 end date that older guides cite no longer applies. 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 (ORS 316.157) available for tax years beginning before Jan. 1, 2032
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 decedent held the property for at least five years before death, the decedent or a family member materially participated in the business during at least 75 percent of the relevant business days of each of the five calendar years before death, the property passes to family members or eligible entities, and a family member materially participates in each of the five calendar years after death. For deaths on or after July 1, 2025, 2025’s HB 3630 also reaches interests held through wholly family-owned entities and trusts, and for deaths on or after January 1, 2026, 2025’s SB 485 adds a separate path for owners of 10 to fewer than 5,000 acres of forestland who actively manage and document forest management activity. 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 other than manufactured homes is at most $75,000 and real property combined with manufactured homes (for estates of decedents dying on or after January 1, 2026) 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 is one of 43 jurisdictions that do not tax Social Security at any income level in 2026. The other 8 exempt benefits only up to an income or age limit. Full rules and statutes: the 51-state table.

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 20% for deaths on or after July 1, 2026	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.

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 sets the personal representative’s commission by statute (ORS 116.173), and the court may allow further compensation that is just and reasonable for extraordinary and unusual services. Attorney fees are awarded as reasonable fees (ORS 116.183), so they have no fixed number. Its simple estate route has two caps, $75,000 of personal property and $200,000 of real property combined with manufactured homes, and both are measured at fair market value without reduction for liens or other debts (ORS 114.510). 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.

Figures verified against ORS 114.510, 116.173, 118.010, 118.145, 316.037, 316.054, 316.157 and 316.680, enrolled 2025 SB 15, SB 485 and HB 3630 and 2023 SB 498, Oregon Legislature bill histories and the 2025 Form OR-706 instructions on September 30, 2026; the Washington and California comparison rows, the SEC advisory-firm statistics and the lowest-threshold-in-the-nation claim were not re-checked.

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Is Oregon a Good State to Retire In for Taxes? (2026: The $1 Million Estate Tax Answer)

What this state guide covers