Live in South Dakota, Work in Oregon: Which State Taxes Your Paycheck?
Answer
One return, filed in Oregon. Your employer withholds Oregon tax on the wages you earn there and you settle up on a Oregon nonresident return. South Dakota does not tax wages, so this pair produces a single state filing rather than two.
Last verified
This is the mirror image of the more common commute. There is no home-state return to file, so the Oregon nonresident return carries the whole obligation — and because South Dakota charges nothing, there is no credit mechanism involved anywhere.
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 a Oregon nonresident return for the wages you earned in Oregon. South Dakota has no wage income tax, so there is no second return and no credit to claim.
The two states, side by side
| South Dakota | Oregon | |
|---|---|---|
| Taxes wages | No | Yes — graduated |
| Reciprocity partners | None | None |
| Convenience rule | No | No |
| Nonresident return | Not applicable | Form OR-40-N |
| Credit for other-state tax | No income tax | Schedule OR-ASC-NP |
| Nonresident safe harbour | Not applicable | None published |
| Local income tax | No | Yes |
| Revenue department | South Dakota Department of Revenue | Oregon Department of Revenue |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Oregon and working in South Dakota gives:Home state only.
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: South Dakota → OregonNo state income tax on your wages
- 1099 contractor: South Dakota → OregonClient state only, if you work there
- Moved mid-year: South Dakota → OregonOne part-year return — the state you moved to
Other South Dakota pairs
Questions people actually ask
I live in South Dakota and work in Oregon. Which state takes the tax out of my paycheck?
One return, filed in Oregon. Your employer withholds Oregon tax on the wages you earn there and you settle up on a Oregon nonresident return. South Dakota does not tax wages, so this pair produces a single state filing rather than two.
Which state should my employer be withholding for?
Oregon. The wages are sourced to Oregon, so Oregon withholding is correct and there is no South Dakota withholding to set up, because South Dakota levies no income tax on wages.
How current is this?
The South Dakota and Oregon rules on this page were last checked against South Dakota Department of Revenue 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.
- South Dakota Department of Revenue — individual income taxaccessed 2026-08-07
- Oregon Department of Revenue — individual income taxaccessed 2026-08-07