States / Oregon
OR state income tax · checked October 14, 2026
Does Oregon tax tips and overtime?
No. Oregon starts from federal taxable income, so the tips and overtime you deduct federally aren’t taxed by Oregon.
| Oregon return | Tips | Overtime |
|---|---|---|
| 2025 | Not taxed (follows federal) | Not taxed (follows federal) |
| 2026 | Not taxed (follows federal) | Not taxed (follows federal) |
The details
Oregon’s return carries the federal deductions through. Nonresidents deduct only Oregon-source tips and overtime.
SB 1507 (2026) updated Oregon’s conformity date and left these deductions in place.
The federal deductions apply either way. See who qualifies for no tax on tips, how the overtime deduction works, and where both go on Schedule 1-A.
States with the same 2026 treatment
All 50 states and D.C. · Oklahoma · Pennsylvania
Questions
Does Oregon tax tips in 2026?
For 2026, Oregon doesn’t tax the qualified tips you deduct on your federal return.
Does Oregon tax overtime in 2026?
For 2026, Oregon doesn’t tax the qualified overtime you deduct on your federal return.
What about my 2025 Oregon return?
For 2025, Oregon doesn’t tax the qualified tips you deduct on your federal return. For 2025, Oregon doesn’t tax the qualified overtime you deduct on your federal return.
Does the federal deduction still apply?
Yes. Whatever your state does, you can still claim the federal deductions on Schedule 1-A if you qualify: up to $25,000 of qualified tips per return and up to $12,500 of qualified overtime ($25,000 joint), phasing down above $150,000 of MAGI ($300,000 joint).