Does Oregon tax military retirement pay?
Partly taxed
Partly. Oregon taxes residents' pensions, but its federal pension subtraction covers the share of service before October 1, 1991: all of it if every month of service was before that date, none if no month was.
In the state's own words
Copied word for word from the official document linked below each quote:
“If all of your months of federal service occurred or points were earned before October 1, 1991, subtract 100 percent of the taxable federal pension income you reported on your federal return.”
“If you have no months of service or points earned before October 1, 1991, you can’t subtract any federal pension.”
Details worth knowing
- Oregon's guide counts “points earned,” the way Reserve and Guard retirement is measured. The subtraction also phases out at higher incomes; see Publication OR-17.
Other retirement income in Oregon
Yes. Oregon taxes the pension income of residents. Some federal pensions for service before October 1991 can be partly or fully subtracted. The Oregon pension page has the details, and the Oregon Social Security page covers Social Security. No. Oregon does not tax Social Security.
Before you file or move
This page is about state income tax only. Your federal return has its own rules for military retired pay, and VA disability compensation is a separate benefit from retired pay. State rules change, and the details (age, years, which kinds of pay qualify, survivor benefits) matter. Check with the Oregon Department of Revenue before you file or move.
Other states in the same group
Check our work
The answer above comes from this document. Follow the link and compare.
- Publication OR-17, 2025 Oregon Individual Income Tax GuideOregon Department of Revenue. Read on November 13, 2026.