Data Source and Methodology
Authoritative Data Source: Oregon Department of Revenue — Publication OR‑17: Oregon Individual Income Tax Guide (Tax Year 2023). Direct link to OR‑17 (2023). All calculations are strictly based on Oregon’s 2023 progressive tax brackets, the Oregon standard deduction, and the Oregon personal exemption credit ($236 per exemption, subject to income limits).
“All calculations are strictly based on the formulas and data provided by this source.”
Local tax references: Metro Supportive Housing Services Tax (metroshs.org; ordinance-based thresholds) and Multnomah County Preschool for All Tax (multco.us). This tool applies commonly cited thresholds and rates to approximate local liabilities.
The Formula Explained
Taxable Income:
TI = \max\{0,\ (GI - PD) - D\}
Progressive State Tax (by filing status s):
Tax_{pre\_cred} = \sum_{i} r_i \cdot \max\{0,\ \min(TI, u_i) - \ell_i\}
where each bracket i has rate r_i and bounds [ℓ_i, u_i). For the top bracket, u_i = \infty.
Personal Exemption Credit (PEC):
PEC = \begin{cases} 236 \times n_{ex}, & \text{if } AGI \le \theta_s \\ 0, & \text{otherwise} \end{cases}
Net State Income Tax:
Tax_{state} = \max\{0,\ Tax_{pre\_cred} - PEC\}
Optional Local and Transit Taxes:
T_{transit} = 0.001 \times GIT_{Metro} = 0.01 \times \max\{0,\ TI - \alpha_s\}T_{PFA} = 0.015 \times \max\{0,\ \min(TI, \beta_s) - \alpha_s\} + 0.015 \times \max\{0,\ TI - \beta_s\}
Total:
T_{total} = Tax_{state} + T_{transit} + T_{Metro} + T_{PFA}
Effective Rate:
ER = 100 \times \frac{T_{total}}{GI}\ \%
Glossary of Variables
- GI: Gross Income (annual, before taxes).
- PD: Pre-tax deductions (401(k), HSA, etc.).
- D: Deduction (Oregon standard or Oregon itemized).
- TI: Oregon Taxable Income after deductions.
- r_i: Marginal tax rate for bracket i.
- [ℓ_i, u_i): Lower and upper taxable-income bounds for bracket i.
- n_ex: Number of personal exemptions eligible for credit.
- θ_s: AGI threshold for exemption credit by filing status s.
- α_s, β_s: Local tax thresholds (Metro and Multnomah tiers) by filing status s.
- ER: Effective tax rate (total OR state + local taxes divided by gross income).
How It Works: A Step-by-Step Example
Scenario: Single filer, GI = $85,000; PD = $9,000; Standard deduction; n_ex = 1; Metro and Multnomah not selected; Transit tax included.
- Compute TI: TI = max(0, (85,000 − 9,000) − 2,420) = $73,580.
- Apply brackets (Single 2023: 4.75% up to $4,050; 6.75% to $10,125; 8.75% to $125,000; 9.9% over): Tax_pre_cred ≈ 4.75%×4,050 + 6.75%×6,075 + 8.75%×(73,580 − 10,125) = $192.38 + $410.06 + $5,554.69 ≈ $6,157.13.
- PEC: AGI assumed = GI − PD = $76,000 ≤ $100,000 (Single), so PEC = 236 × 1 = $236.
- Net state tax: $6,157.13 − $236 = $5,921.13.
- Transit tax (0.1%): 0.001 × 85,000 = $85.
- Total: $5,921.13 + $85 = $6,006.13; ER ≈ 7.07%.
Note: This example rounds to the nearest cent and assumes no other Oregon additions, subtractions, or credits.
Frequently Asked Questions (FAQ)
Which tax year is supported?
2023. Results are aligned with Oregon’s 2023 brackets, standard deduction, and personal exemption credit amounts.
Does this include federal taxes?
No. This calculator only estimates Oregon state and optional local taxes.
How are personal exemptions handled?
The calculator subtracts $236 per eligible exemption for 2023 when your AGI is within assumed limits ($100,000 Single/HOH/MFS; $200,000 MFJ). Otherwise, the credit is set to $0.
What about local taxes like Metro SHS and Multnomah PFA?
You can toggle these on. The tool uses Oregon taxable income as the base and commonly referenced thresholds to estimate these local taxes.
Is the statewide transit tax always applied?
By default, yes (0.1% of wages). You can disable it if you only want to see state income tax.
Are itemized deductions supported?
Yes. Choose Itemized and enter your Oregon itemized deductions to replace the standard deduction.
Is this a substitute for tax advice?
No. This is an educational estimate. Always consult official instructions or a qualified tax professional for your situation.