Oregon tax deductions and write-offs (2026)

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.

Yes. 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. Classified as taxed because the retirement income credit is limited to low-income retirees.

No. Oregon subtracts all Social Security benefits included in federal income. Statutory basis: ORS 316.054.

Rarely: Oregon has no statewide sales tax, so deducting state income tax is almost always bigger. No sales tax; new vehicles (7,500 miles or less) carry a 0.5% vehicle privilege tax when sold by Oregon dealers, or a 0.5% vehicle use tax when bought from out-of-state dealers.

Yes: Oregon offers the Oregon Earned Income Credit, 14% of the federal EITC for 2026; 17% if you have a dependent under age 3 (up from 9%/12%) (refundable). ITIN filers eligible via Schedule OR-EIC-ITIN; this is now permanent. The 2026 rates come from SB 1507 (2026 session). The DOR page still showed the 2025 rates of 9%/12% when checked. Credit currently sunsets Jan 1, 2032.

Yes on your federal return if you itemize, within the $40,400 SALT cap. Oregon adds its own break: senior and disabled property tax deferral: state pays your county taxes as a lien; 62+ or disabled, income under $70,000 (2026).

No: Oregon doesn't offer a renter's credit or rent rebate. Oregon has no state renter tax credit or renter property tax refund. The state's Elderly Rental Assistance program helps very-low-income, unstably housed renters 58+ through local agencies, but it is housing aid, not a tax break. Lower-income renters can still claim Oregon's earned income credit: 14% of the federal EITC for 2026; 17% if you have a dependent under age 3 (up from 9%/12%).

No: Oregon doesn't base registration on your car's value, so it isn't deductible as personal property tax. Two-year passenger fees run $126-$376 based on combined MPG and EV status, plus any flat county fees.

Oregon taxes income up to 9.9% but has no sales tax, and allows a limited subtraction for federal income tax paid.

Yes on your Oregon return: Refundable credit up to $190 single / $380 joint; credit % of contribution set by AGI (100% to 5%). Only contributions to the state's own plan count. Replaced the subtraction in 2020; contributions count until filing deadline; credit forfeited if funds later withdrawn for unrelated use.

Yes: Oregon Kids Credit (2025 figures): $1,050 per dependent child age 5 or younger, for up to 5 children ($5,250 max), at modified AGI of $26,550 or less. Phases out to $0 at $31,550. Refundable. ITIN filers are eligible.

Yes, as a business expense: Oregon charges $100 to form an LLC; ongoing: $100 annual report. Due on the formation anniversary date.