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Oregon
Employee Obligations (Which Returns YOU Must File)
Arizona has a reciprocity agreement with Oregon. If your only income from Oregon is wages, salary, tips, or commissions, file your Arizona return only — no Oregon return needed. Give your Oregon employer your reciprocity form (WEC) each year.
Employer Obligations (What Your Employer Must Withhold & Remit)
Reciprocity applies. If the employee provides the reciprocity form (WEC), withhold Arizona tax instead of Oregon tax. Must still register for Oregon unemployment insurance. Register for withholding, unemployment, Paid Leave Oregon, and transit taxes from day 1. Unemployment applies to the first $56,700 of wages. Paid Leave Oregon employer contribution is 0.4% for employers with 25 or more employees. TriMet transit tax: employer pays 0.8237% in the Portland area. Lane Transit: employer pays 0.79% in the Eugene area.
City & Local Income Taxes (Extra Filings Beyond the State Return)
The Portland area is expensive for high earners. Metro Supportive Housing Services (SHS) tax: 1% on income above $125,000 single / $200,000 joint. Multnomah County Preschool for All (PFA): 1.5% above $125,000/$200,000 plus an additional 1.5% above $250,000/$400,000. Combined local taxes for high earners can exceed 4% on top of the state rate. All apply to nonresidents. The M1CR credit does NOT cover these local taxes.
Other Paycheck Deductions (Disability, Paid Leave, Unemployment)
Statewide transit tax 0.2% (doubled from 0.1% effective January 1, 2026; returns to 0.1% on January 1, 2028) plus Paid Leave Oregon 0.6% (1.0% if employer has fewer than 25 employees).
Remote Work Tax Risk — Convenience of Employer (COE) Rule
Oregon has a limited COE rule that only applies to nonresident corporate officers and executives whose compensation is exclusively for managerial services. Regular Arizona employees are not affected.
Reciprocity Agreement — File Home State Only for Wages
Arizona has a reciprocity agreement with Oregon. For wage income, you only need to file your Arizona return. Give your employer the reciprocity form (WEC) each year to avoid Oregon withholding.
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This is general information, not tax or legal advice. Laws change frequently. Always consult a licensed CPA or tax attorney for your specific situation. All information researched as of March 21, 2026.