Washington vs Oregon Taxes: Complete Comparison
Washington vs Oregon Taxes 2026: Complete Comparison
Washington and Oregon are neighboring states with opposite tax philosophies: Washington has no income tax but high sales tax. Oregon has no sales tax but high income tax.
So which is better? For most earners, Washington wins significantly.
Quick Comparison
| Tax Category | Washington | Oregon | Winner |
|---|---|---|---|
| Income Tax | 0% | 4.75% - 9.9% | ⭐ Washington |
| Sales Tax | 9.38% avg | 0% | ⭐ Oregon |
| Property Tax | 0.93% | 0.90% | ⭐ Oregon (barely) |
| Total Tax Burden | 10.7% | 10.2% | ⭐ Oregon (barely) |
| Capital Gains Tax (WA) | 7% on $250K+ | Taxed as income | Complicated |
Bottom Line: Washington wins for high earners. Oregon wins for low earners and big spenders.
Total Federal Tax
$16,712
Effective Tax Rate
16.71%
Your Tax Bracket
22%
Marginal tax rate on next dollar earned
Tax Breakdown by Bracket
2026 Tax Brackets (Single)
Income Tax: The Key Difference
Washington Income Tax 2026
NO STATE INCOME TAX on:
- Wages/salaries
- Business income
- Retirement income
Exception: 7% capital gains tax on gains above $250,000/year (stocks, bonds, not real estate)
Oregon Income Tax 2026
Single Filers:
- 4.75% on income up to $4,050
- 6.75% on $4,051 - $10,200
- 8.75% on $10,201 - $125,000
- 9.9% on $125,001+
Married Filing Jointly:
- 4.75% on income up to $8,100
- 6.75% on $8,101 - $20,400
- 8.75% on $20,401 - $250,000
- 9.9% on $250,001+
Examples:
- $75K: ~$5,150 OR tax
- $100K: ~$7,350 OR tax
- $150K: ~$11,850 OR tax
Income Tax Comparison
| Income | WA | OR | WA Saves |
|---|---|---|---|
| $50K | $0 | $3,400 | $3,400 |
| $75K | $0 | $5,150 | $5,150 |
| $100K | $0 | $7,350 | $7,350 |
| $150K | $0 | $11,850 | $11,850 |
Take Standard Deduction
$47,500
Standard deduction of $47,500 exceeds itemized deductions by $22,500
Standard Deduction
$47,500
Itemized Deductions
$25,000
Your total deductible expenses
🎉 NEW 2026 Senior Deduction (OBBBA)
$12,000 additional deduction for taxpayers 65+
Deduction Breakdown
2026 Standard Deduction Amounts
- • Single: $16,100
- • Married Filing Jointly: $32,200
- • Head of Household: $24,150
- • Single: $2,050 per condition
- • Married: $1,650 per person, per condition
- • $6,000 per taxpayer age 65+
- • Phases out at $75K (single) / $150K (married)
- • 6% reduction per dollar over threshold
💡 Optimization Tips
• You're benefiting from the NEW 2026 senior deduction - a valuable OBBBA provision
Sales Tax: Oregon's Advantage
Washington Sales Tax
- State: 6.5%
- Average Total: 9.38%
- Seattle: 10.35%
Oregon Sales Tax
0% - No sales tax at all!
Sales Tax Impact
$40,000 annual taxable purchases:
- Seattle: $4,140 sales tax
- Portland: $0 sales tax
- Difference: $4,140 saved in OR
However: Most people don't spend $40K on taxable goods. Plus income tax difference usually bigger.
The Break-Even Analysis
At what income does WA beat OR?
Single person spending $40K on taxable goods:
- Below ~$55K income: Oregon better
- Above $55K income: Washington better
Family spending $50K on taxable goods:
- Below ~$75K income: Oregon better
- Above $75K income: Washington better
Most households earning $75K+ save more in Washington.
Over-Withholding
$15,600
You're giving the IRS an interest-free loan. Expect a refund.
Estimated Tax Owed
$0
Total Withholding
$15,600
Recommended Action
Tax Calculation Breakdown
Payment Schedule
💡 Withholding Tips
• You're over-withholding by $15,600/year. Consider reducing to increase take-home pay
• Submit new W-4 form to your employer to adjust withholding by $600/paycheck
Real-World Scenarios
Scenario 1: Tech Worker (Seattle vs Portland)
Income: $140,000
Spending: $45,000 taxable
Rents apartment
Seattle:
- Income tax: $0
- Sales tax: $4,658
- Total: $4,658
Portland:
- Income tax: $10,750
- Sales tax: $0
- Total: $10,750
Washington saves: $6,092/year 🎉
Scenario 2: Family (Vancouver WA vs Portland OR)
Income: $120,000
$550K home
Spending: $50,000 taxable
2 kids
Vancouver WA:
- Income tax: $0
- Sales tax: $4,305
- Property tax: $5,115
- Total: $9,420
Portland OR:
- Income tax: $9,100
- Sales tax: $0
- Property tax: $4,950
- Total: $14,050
Washington saves: $4,630/year 🎉
Scenario 3: Retiree (Oregon wins this one!)
Income: $50,000 (retirement)
$400K paid-off home
Spending: $35,000 taxable
Washington:
- Income tax: $0
- Sales tax: $3,283
- Property tax: $3,720
- Total: $7,003
Oregon:
- Income tax: $3,400
- Sales tax: $0
- Property tax: $3,600
- Total: $7,000
Oregon saves: $3/year (essentially tied!)
Total Child Tax Credit
$4,400
Refundable Portion
$0
Credit Breakdown
Refundable vs. Non-Refundable Credit
2026 Child Tax Credit Parameters
Credit Amounts
- • Per qualifying child (under 17): $2,200
- • Per other dependent (17+): $500
- • Refundable portion limit: $1,700/child
Phase-Out Thresholds
- • Single: $200,000
- • Married Filing Jointly: $400,000
- • Reduction: $50 per $1,000 over threshold
💡 Optimization Tips
• Your income is well below phase-out threshold - you're receiving full credit
Which State Wins for You?
Washington Better For:
✅ Earners making $75K+ (income tax savings)
✅ Tech workers (no tax on high salaries)
✅ Business owners (no income tax)
✅ Low spenders (sales tax less impactful)
✅ Those who shop online (sales tax applies)
Oregon Better For:
✅ Lower earners (<$75K)
✅ Big spenders (no sales tax!)
✅ Retirees with modest income
✅ Those buying major purchases (cars, furniture)
✅ People who hate sales tax complexity
Special Considerations
Oregon vs Clark County WA Strategy: Many people live in Vancouver WA (no income tax) and shop in Portland OR (no sales tax). Best of both worlds?
Not quite: You still owe WA sales tax on major purchases (cars, etc.) even if bought in OR.
WA Capital Gains Tax: Washington's 7% capital gains tax on $250K+ gains affects:
- Stock sales
- Business sales
- Not real estate
- Not retirement accounts
This is new (2022) and controversial.
Oregon Metro Tax: Portland metro area has additional 1% income tax for homeless services.
Your QBI Deduction (Section 199A)
$20,000
20% of your qualified business income
Estimated Tax Savings
$4,800
Based on your marginal tax bracket
QBI Deduction Breakdown
2026 QBI Deduction Parameters
Income Thresholds (2026)
- • Single/HoH: $201,775 threshold
- • Married Joint: $403,500 threshold
- • Phase-in range: $75,000 (single) / $150,000 (married)
Deduction Rules
- • Standard deduction: 20% of QBI
- • Limited to 20% of taxable income
- • W-2 wage limit may apply above threshold
- • SSTB restrictions for high earners
💡 Optimization Strategies
• Your income is below the threshold - no wage or SSTB limitations apply. Focus on maximizing QBI.
FAQ
Q: Can I live in WA and work in OR?
Yes. You pay OR income tax on income earned working in OR. But if you work remotely from WA, no OR tax.
Q: Can I live in OR and work in WA?
Yes. WA has no income tax, so you just pay federal tax (no state tax at all).
Q: What about Vancouver WA + shopping in Portland?
Many do this. You legally owe WA "use tax" on purchases brought to WA, but it's rarely enforced for small items.
Q: Which has better quality of life?
Subjective! WA has Seattle (tech hub, higher salaries). OR has Portland (quirky culture, better food scene). Both have great outdoors access.
Conclusion
For most earners making $75K+, Washington saves $3,000-$12,000+ annually compared to Oregon.
The break-even depends on income vs spending: High earners favor WA, big spenders favor OR.
A $120K household typically saves $4,000-5,000/year in Washington even accounting for higher sales tax.
Calculate Your Scenario:
Total Federal Tax
$16,712
Effective Tax Rate
16.71%
Your Tax Bracket
22%
Marginal tax rate on next dollar earned
Tax Breakdown by Bracket
2026 Tax Brackets (Single)
Take Standard Deduction
$47,500
Standard deduction of $47,500 exceeds itemized deductions by $22,500
Standard Deduction
$47,500
Itemized Deductions
$25,000
Your total deductible expenses
🎉 NEW 2026 Senior Deduction (OBBBA)
$12,000 additional deduction for taxpayers 65+
Deduction Breakdown
2026 Standard Deduction Amounts
- • Single: $16,100
- • Married Filing Jointly: $32,200
- • Head of Household: $24,150
- • Single: $2,050 per condition
- • Married: $1,650 per person, per condition
- • $6,000 per taxpayer age 65+
- • Phases out at $75K (single) / $150K (married)
- • 6% reduction per dollar over threshold
💡 Optimization Tips
• You're benefiting from the NEW 2026 senior deduction - a valuable OBBBA provision
Your Earned Income Tax Credit
$4,250
Credit being phased out
EITC Credit Breakdown
Income Analysis
2026 EITC Parameters
Maximum Credits (2026)
- • No children: $664
- • 1 child: $4,427
- • 2 children: $7,316
- • 3+ children: $8,231
Key Requirements
- • Must have earned income
- • Investment income limit: $11,950
- • Must file tax return (even if not required)
- • Valid Social Security number required
💡 Optimization Tips
• Your credit is being reduced by $177.378 due to phaseout
• Consider tax-deferred retirement contributions to reduce AGI and increase EITC
AMT Owed
$0
Total Tax Liability
$65,000
AMT Calculation Breakdown
2026 AMT Parameters
- • Single: $90,100
- • Married Joint: $140,200
- • Single: $500,000
- • Married Joint: $1,000,000
- • Phaseout rate: 50% (increased from 25%)
- • 26% on first $244,500
- • 28% on excess over $244,500
Last Updated: Jan 2, 2026
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