T-bills and savings bonds in Oregon: the tax-equivalent yield
Oregon reaches its top income tax rate at $125,000 for a single filer, and two Portland-area taxes can stack on top of it; Treasury bill and savings bond interest is free of all three.
A CD or savings account in Oregon must pay
5.003 %
to match 4.351 % from a T-bill or savings bond, which Oregon cannot tax.
| Federal marginal rate (2026 brackets) | 24 % |
| Oregon marginal rate | 9.90 % |
| State and local tax saved per $10,000 a year | $43.07 |
Worked out by Radif Partners · How we calculate · schedule read on the Oregon revenue department site, tax year 2026
A single Oregonian with $140,000 of taxable income is already in the top bracket: 9.9 % on every further dollar of bank interest, plus 24 % federal. Interest on Treasury bills and U.S. savings bonds is exempt from Oregon tax. The 26-week bill auctioned on October 13, 2026 yields 4.351 %; to beat it after both taxes, a CD or savings account must pay more than 5.003 %. That makes each $10,000 kept in bills for a year worth $43.07 of Oregon tax not paid. The brackets are the 2026 ones, taken from the Department of Revenue's withholding formula, and the $125,000 start of the top rate is fixed in statute. Residents of the Metro district and of Multnomah County can owe the Supportive Housing Services tax and the Preschool for All tax as well; both are computed from Oregon taxable income, so Treasury interest escapes them too. Pick the local tax in the calculator to include it.
Four brackets, and the last one starts early
Oregon's schedule is short. The first three brackets are used up by the first $11,400 of a single filer's income, and the 8.75 % rate then applies all the way to $125,000. From there it is 9.9 %. The top threshold is written into the statute and not indexed for inflation, so more savers cross it each year as wages grow.
| Rate | Single, from | Joint, from |
|---|---|---|
| 4.75 % | $0 | $0 |
| 6.75 % | $4,550 | $9,100 |
| 8.75 % | $11,400 | $22,800 |
| 9.9 % | $125,000 | $250,000 |
Oregon also lets you subtract part of the federal income tax you paid, up to a cap. We leave it out because it depends on the whole return, so the state rate applied here can be slightly above the one you really pay.
Metro and Multnomah County
Two Portland-area taxes reach investment income. The Supportive Housing Services tax applies to people who live in the Metro district (and to those who work there, on their Metro income); the Preschool for All tax applies to residents of Multnomah County. Portland residents inside Multnomah County owe both. Each starts from Oregon taxable income, which means the federal interest you subtract on the state return never enters them.
| Local tax | Single | Joint |
|---|---|---|
| Metro Supportive Housing Services | 1 % over $128,000 | 1 % over $205,000 |
| Multnomah County Preschool for All | 1.5 % over $125,000, then 3 % over $250,000 | 1.5 % over $200,000, then 3 % over $400,000 |
Added together, a Portland household above the last thresholds faces 13.9 % of state and local tax on bank interest, more than the 13.3 % top rate of California.
Salem against Portland
Take the single filer in Salem from the summary: 9.9 % state, no local tax, a break-even CD rate of 5.003 %. Now a married couple in Portland with $450,000 of joint taxable income. Oregon takes 9.9 %, the two local taxes 4 %, and the federal rate is 32 %. Their CD must pay 5.469 %; without the local taxes it would be 5.092 %. On $10,000 at the bill yield the couple avoids $60.48 a year.
Portland local taxes and the Oregon break-even rate
A CD or savings account in Oregon must pay
5.535 %
| Federal marginal rate (2026 brackets) | 35 % |
| Oregon marginal rate | 9.90 % |
| Local rate | 4.000 % |
| State and local tax saved per $10,000 a year | $60.48 |
Scale it up to a balance of $100,000, a common figure for a household parking the proceeds of a home sale. At the bill's yield, the interest for a year is $4,351. In a Portland bank account above the local thresholds, Oregon and the two local taxes would take $605 of it; in Treasury bills, nothing at the state or local level.
Code 315 on Schedule OR-ASC
The subtraction is claimed on Schedule OR-ASC with code 315, interest and dividends on U.S. bonds and notes, under ORS 316.680. Publication OR-17 names Treasury bill interest among the items that qualify. Savings bond interest, reported federally when you cash the bonds, is interest on a U.S. obligation too, exempt under the same federal law (31 U.S.C. 3124). For the general method behind these equivalents see state tax on T-bills; for the state to the south, California.