The short version
Which side of the Columbia you live on decides the whole return
You live in Oregon
- Oregon taxes all your income, wherever it was earned.
- A Washington job does not take you out of Oregon tax.
- Metro SHS applies if your address is inside the district.
- Preschool for All applies inside Multnomah County.
- Washington still reaches you for capital gains in some cases.
You live in Washington
- No Washington personal income tax on wages, so no state return on them.
- Oregon taxes only work physically performed in Oregon.
- Days worked at home in Clark County are generally not Oregon-source.
- Oregon withholding on those days is often recoverable.
- No Oregon local taxes — the Metro and Multnomah taxes follow the Oregon address.
Everything below is the detail behind this table. The two questions it turns on — where you live, and where you physically worked — are separate, and collapsing them is where almost every cross-border mistake starts.
The two questions that decide everything
Almost every cross-border mistake comes from collapsing two separate questions into one. Keep them apart and the rest follows.
- 1Where do you live? Residency decides which state may tax your worldwide income. Oregon residents are taxed by Oregon on everything, wherever it was earned. Washington has no personal income tax, so Washington residents have no state return to file on wages at all.
- 2Where did you physically perform the work? Sourcing decides which state may tax a particular dollar. Oregon taxes non-residents on Oregon-source income — and for wages, the source is where the services were physically performed.
The residency and work-location matrix
| Your situation | Oregon income tax | Metro SHS / Multnomah PFA | Where it turns |
|---|---|---|---|
| WA resident, works on-site in Portland | Oregon-source wages taxable; file OR-40-N | Workdays inside the district or county are locally sourced | Track office, field and home days separately |
| WA resident, fully remote from home for an Oregon employer | Oregon does not tax work performed outside Oregon | No local tax where you never enter the jurisdiction for work | File a non-resident return to recover withholding |
| WA resident, hybrid schedule | Only the Oregon-work portion | Only the district-sourced portion, subject to thresholds | Employer HQ is not the test — your calendar is |
| OR resident, works in Vancouver | Worldwide income on the Oregon resident return | Per residency, not per work location | No Washington wage tax exists to credit |
| Moved mid-year in either direction | Part-year return, OR-40-P | Local sourcing splits at the move date too | Update withholding the week you move |
Start with your situation
- I live in Vancouver and work in PortlandThe core scenario — what you owe and what you do not
- I work remotely from Washington for an Oregon employerOften a refund return. Read this one first
- I work a hybrid schedule across the riverHow to allocate days defensibly
- I am moving between Oregon and WashingtonTiming changes the tax on everything nearby
- I run a business selling into WashingtonB&O tax is on gross receipts, not profit
- I have capital gains and a Washington connectionWho actually pays Washington capital gains tax
The local taxes that cross the river with you
Washington residents are frequently surprised that a state with no income tax can still leave them owing a city tax. Metro Supportive Housing Services and Multnomah County Preschool for All are assessed on income sourced to their jurisdictions — including wages earned by non-residents working there.
| Tax | Applies to | Threshold | Rate |
|---|---|---|---|
| Metro SHS | Residents of the Metro district, and non-residents on income sourced there | $128,000 single / $205,000 joint (2026) | 1% of income above the threshold |
| Multnomah PFA | Residents of Multnomah County, and non-residents on income sourced there | $125,000 single / $200,000 joint | Tiered, starting at 1.5% |
What we ask before answering any cross-border question
- Where did you physically perform the work, day by day?
- How many days in each jurisdiction — Oregon, the Metro district, Multnomah County, Washington?
- What did the employer actually withhold, and for which state?
- What is the source of each income stream — wages, self-employment, rental, investment, business?
- If you moved, on what date did residency actually change, and what changed with it?
Nobody can answer a cross-border question from a residence address alone. Anyone who tries is guessing, and the guess is usually the expensive direction.
I live in Washington. Do I have to file an Oregon return at all?
Only if you have Oregon-source income — most commonly wages for work physically performed in Oregon. If you have Oregon withholding but no Oregon-source income, you file a non-resident return specifically to get it back.
My employer says they have to withhold Oregon tax because they are an Oregon company.
Employer location is not the sourcing test in Oregon. Where you performed the services is. Employers often default to withholding for their own state because it is simpler for them, and payroll systems are frequently configured that way at setup and never revisited.
Does Washington tax my Oregon income?
Washington has no personal income tax, so there is no Washington return for wages. Washington does have a capital gains tax and a business B&O tax, both of which can apply to Washington residents — see those pages.
I am an Oregon resident working in Vancouver. Do I save tax?
No. Oregon taxes residents on worldwide income, and because Washington levies no wage tax there is nothing to credit against the Oregon liability. Working in Washington saves an Oregon resident nothing on wages.
How far back can I recover over-withheld Oregon tax?
Generally three years from the original due date of the return. If you have been remote from Washington for several years with Oregon withholding, more than one year may still be open — but the oldest one closes on a fixed date.
What records should I be keeping?
A contemporaneous calendar showing where you worked each day. Kept during the year it is evidence; reconstructed in April it is an estimate, and estimates are what get adjusted on examination.
Get the sourcing right before you file
Cross-border returns turn on facts nobody asks you about until it is too late. An appointment settles which state taxes what.
Written by
Enrolled Agent, Oregon Licensed Tax Consultant
License number: Enrolled Agent 00160070-EA · Oregon Licensed Tax Consultant 35746-C
Heather has spent more than a decade preparing individual and business returns across the Portland metro and the Columbia Gorge, and holds unlimited rights to represent taxpayers before the IRS.
Last reviewed
This page is general information about Oregon, Washington and federal tax rules, not advice about your own return. Thresholds and rates change every year. Figures were verified as of August 2026 — check the linked official sources, or talk to us about your situation.