Does Oregon Tax Social Security? A Retiree's Complete Tax Guide

If you’re planning retirement in Oregon or already receiving Social Security benefits here, you’re likely wondering about the tax implications. Here’s what Oregon residents need to know: your state doesn’t tax Social Security income. However, this favorable state law doesn’t tell the whole story. The federal government has different rules, and understanding them is critical for your retirement planning.

Oregon’s Social Security Tax Status: The Good News

Oregon is among 42 states plus Washington, D.C. that have chosen not to tax Social Security benefits at the state level. This decision is part of a broader trend. Recently, West Virginia joined this group in 2026, while Kansas, Missouri, Nebraska, and North Dakota all eliminated their Social Security taxes between 2021 and 2024. States implement these policies to attract and retain retirees, boosting local economies as seniors spend money and pay other forms of taxes.

Being in one of these states means you won’t face state income tax on your Social Security checks. This is a significant advantage compared to the nine states that do tax Social Security benefits. For Oregon residents, this translates to meaningful savings during retirement years.

The Federal Factor You Can’t Ignore

Unfortunately, state tax relief doesn’t mean you’re completely in the clear with the IRS. Federal tax rules apply regardless of where you live. The IRS uses a calculation called “combined income” to determine whether your Social Security benefits are subject to federal taxation.

Your combined income consists of three components:

• Half of your annual Social Security benefits
• Your adjusted gross income (AGI)
• Any nontaxable interest earned

Here’s a practical example: if you receive $24,000 in annual Social Security, have an AGI of $20,000, and earn $1,000 in nontaxable interest, your combined income totals $33,000 ($12,000 + $20,000 + $1,000).

How to Calculate Your Taxable Social Security Income

Once the IRS determines your combined income, they apply federal tax brackets to decide how much of your benefits become taxable:

For single filers:

• Less than $25,000: 0% of benefits taxed
• $25,000 to $34,000: Up to 50% of benefits taxed
• More than $34,000: Up to 85% of benefits taxed

For married couples filing jointly:

• Less than $32,000: 0% of benefits taxed
• $32,000 to $44,000: Up to 50% of benefits taxed
• More than $44,000: Up to 85% of benefits taxed

In our earlier example, a single Oregon filer with combined income of $33,000 could have up to 50% of their Social Security benefits ($12,000) added to their other income and taxed at their regular income tax rate.

Which States Don’t Tax Social Security?

Beyond Oregon, the following 41 states and Washington, D.C. also exempt Social Security from state taxation: Alabama, Alaska, Arizona, Arkansas, California, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Virginia, Washington, West Virginia, and Wisconsin.

The contrast is stark: only Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, Rhode Island, and Vermont currently tax Social Security benefits, though some have recently changed or are phasing out these taxes.

Planning Your Oregon Retirement

The key takeaway for Oregon residents is this: while your state offers generous Social Security treatment, you still need to understand federal taxation rules. Most people can minimize or avoid federal taxes on Social Security by managing their combined income strategically. This might involve timing withdrawals from retirement accounts, carefully planning when to start taking Social Security, or considering other income sources.

Understanding these rules now helps you make smarter financial decisions and potentially preserve more of your hard-earned retirement income. Consider consulting a tax professional who understands how Social Security taxation works in Oregon to develop a personalized strategy for your situation.