Live in Idaho, Work in Oregon: Which State Taxes Your Paycheck?
Answer
Both states tax the same wages, and a credit undoes the overlap. Oregon withholds as your work state and you file a Oregon nonresident return; Idaho taxes residents on all income, so you also file at home and claim the credit for tax paid to Oregon. File Oregon first.
Last verified
Two states can lawfully tax the same wages: Oregon because the work happened there, Idaho because you live there. Nothing prevents the overlap in advance — it is unwound afterwards, on the Idaho return, through the credit for taxes paid to another state.
A Idaho resident taxed by another state on the same income claims the credit for taxes paid to other states on Form 39NR. The credit is capped at the Idaho tax on that income, so it removes the double tax but never refunds the excess when the other state charges more.
Oregon also has a layer below the state one, and it is the layer that survives every agreement: The Portland area layers two local income taxes on top of the state tax — the Metro supportive housing tax and the Multnomah County preschool tax — and both reach nonresidents on income sourced to the district. They are administered by the City of Portland Revenue Division, not the Department of Revenue.
What you file
- 1Nonresident return · OregonForm OR-40-N
File the Oregon nonresident return FIRST — you need the Oregon tax figure before you can complete Idaho.
- 2Resident return · IdahoForm 39NR
File a Idaho resident return reporting all income, then claim the credit for tax paid to Oregon. The credit is capped at what Idaho would have charged on that same income, so if Oregon taxes it at a higher rate the difference is not refunded.
The two states, side by side
| Idaho | Oregon | |
|---|---|---|
| Taxes wages | Yes — flat | Yes — graduated |
| Reciprocity partners | None | None |
| Convenience rule | No | No |
| Nonresident return | Form 43 | Form OR-40-N |
| Credit for other-state tax | Form 39NR | Schedule OR-ASC-NP |
| Nonresident safe harbour | None published | None published |
| Local income tax | No | Yes |
| Revenue department | Idaho State Tax Commission | Oregon Department of Revenue |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Oregon and working in Idaho gives:Both states — credit offsets the double tax.
Same two states, different situation
The withholding answer turns on how you are paid and where the work happens, not only on which two states are involved.
- Remote worker: Idaho → OregonHome state only
- 1099 contractor: Idaho → OregonHome state, plus the client state if you work there
- Moved mid-year: Idaho → OregonTwo part-year returns
Other Idaho pairs
Questions people actually ask
I live in Idaho and work in Oregon. Which state takes the tax out of my paycheck?
Both states tax the same wages, and a credit undoes the overlap. Oregon withholds as your work state and you file a Oregon nonresident return; Idaho taxes residents on all income, so you also file at home and claim the credit for tax paid to Oregon. File Oregon first.
Which state should my employer be withholding for?
Oregon. The wages are sourced to Oregon, so Oregon withholding is correct and there is no Idaho withholding to set up.
Will I end up paying tax twice on the same income?
Not twice over, but you will pay the higher of the two rates. Idaho gives residents a credit for tax paid to Oregon on the same income, claimed on Form 39NR. The credit is capped at the Idaho tax on that income, so if Oregon taxes it more heavily the excess is not refunded by either state.
How current is this?
The Idaho and Oregon rules on this page were last checked against Idaho State Tax Commission and Oregon Department of Revenue on 2026-08-07. We re-check the full grid every December after state legislative sessions close, and re-check the convenience-of-the-employer states quarterly because that is where the rules move fastest.
Sources
Every fact above comes from the revenue department that publishes the rule. We do not cite secondary summaries, and we do not restate a figure we could not find at source.
- Idaho State Tax Commission — individual income taxaccessed 2026-08-07
- Oregon Department of Revenue — individual income taxaccessed 2026-08-07