Live in Washington, Work in Oregon: Which State Taxes Your Paycheck?
Answer
The work state takes it. Oregon taxes nonresidents on income earned within the state and expects a nonresident return; Washington has no wage income tax, so nothing is due there. This is the common pattern for people who live in a no-tax state and commute across the line.
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 Washington 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. Washington has no wage income tax, so there is no second return and no credit to claim.
The two states, side by side
| Washington | 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 | Washington State 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 Washington 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: Washington → OregonNo state income tax on your wages
- 1099 contractor: Washington → OregonClient state only, if you work there
- Moved mid-year: Washington → OregonOne part-year return — the state you moved to
Other Washington pairs
Questions people actually ask
I live in Washington and work in Oregon. Which state takes the tax out of my paycheck?
The work state takes it. Oregon taxes nonresidents on income earned within the state and expects a nonresident return; Washington has no wage income tax, so nothing is due there. This is the common pattern for people who live in a no-tax state and commute across the line.
Which state should my employer be withholding for?
Oregon. The wages are sourced to Oregon, so Oregon withholding is correct and there is no Washington withholding to set up, because Washington levies no income tax on wages.
How current is this?
The Washington and Oregon rules on this page were last checked against Washington State 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.
- Washington State Department of Revenue — individual income taxaccessed 2026-08-07
- Oregon Department of Revenue — individual income taxaccessed 2026-08-07