Military retirement pay in Oregon
Varies
Does Oregon Tax Military Retirement Pay?
Short answer: Partly. Oregon taxes military retired pay except the share earned from service before Oct. 1, 1991 (months of pre-October 1991 service divided by total months); retirees whose service all came after that date are fully taxed. Low-income retirees may qualify for Oregon's retirement income credit. Bills to add new exemptions (SB 225, HB 2050, SB 519 in 2025) did not pass. For most current retirees the result is effectively full taxation. Other retirement income: Pensions and 401(k)/IRA withdrawals are taxed. Taxpayers 62+ with low household income and little Social Security may qualify for a 9% retirement income credit.
Military retired pay is taxable federally; VA disability compensation isn't taxed federally or by any state.
Records to keep: Keep your state return, W-2s and 1099s (1099-R, SSA-1099), and any state credit worksheets. Check your state revenue department's current-year instructions before you file.
Military retirement pay in Oregon
Varies
Individuals / Personal Taxes
Partly. Oregon taxes military retired pay except the share earned from service before Oct. 1, 1991 (months of pre-October 1991 service divided by total months); retirees whose service all came after that date are fully taxed. Low-income retirees may qualify for Oregon's retirement income credit. Bills to add new exemptions (SB 225, HB 2050, SB 519 in 2025) did not pass. For most current retirees the result is effectively full taxation. Other retirement income: Pensions and 401(k)/IRA withdrawals are taxed. Taxpayers 62+ with low household income and little Social Security may qualify for a 9% retirement income credit.
Business justification
Partly. Oregon taxes military retired pay except the share earned from service before Oct. 1, 1991 (months of pre-October 1991 service divided by total months); retirees whose service all came after that date are fully taxed. Low-income retirees may qualify for Oregon's retirement income credit. Bills to add new exemptions (SB 225, HB 2050, SB 519 in 2025) did not pass. For most current retirees the result is effectively full taxation. Other retirement income: Pensions and 401(k)/IRA withdrawals are taxed. Taxpayers 62+ with low household income and little Social Security may qualify for a 9% retirement income credit. Military retired pay is taxable federally; VA disability compensation isn't taxed federally or by any state.
Category
- Personal Tax Deductions