Oregon Estate Tax 2026: $1M Exemption, Rates, Rules

Oregon's estate tax kicks in at $1 million, and that threshold is not indexed for inflation, so it does not rise as home values do.1 Add up a paid-off home, a retirement account, and a life insurance policy, and a middle-class estate can cross that line. This guide tells you whether your estate owes, how much, and which form the executor files.

If you live in Oregon and own a home, this is a number worth knowing before you assume the tax is only for the wealthy.

In This Guide

• Oregon Estate Tax at a Glance
• How the Oregon Estate Tax Works
• Why the Million-Dollar Threshold Catches So Many
• Estate Tax Is Not Inheritance Tax
• Not the Federal Tax, Not Medicaid Recovery
• Frequently Asked Questions
• Next Steps

Oregon Estate Tax at a Glance

Here is the full picture in one table. Oregon's tax is technically an estate transfer tax, paid by the estate before assets pass to heirs, and there is no separate inheritance tax on the people who receive the money. The figures below come from the Oregon Department of Revenue's Form OR-706 instructions.1

How the Oregon Estate Tax Works

Oregon's tax is officially an estate transfer tax, but it works like an estate tax everywhere it counts: it is a tax on the value of everything a person owned at death, paid by the estate, not by the heirs. The executor files the return and pays the bill out of estate assets before the remainder is distributed.

The threshold is the part that surprises people. A return must be filed if the value of the gross estate at the date of death is $1,000,000 or more.1 Read gross carefully: it is the value of what the person owned, before debts and expenses come off, so a house with a mortgage counts at its full value for the filing test. And that $1,000,000 is not indexed for inflation, so as home values and account balances rise, more estates cross the line every year without any change in the law.1

The rate is graduated, climbing in brackets from 10 percent to 16 percent as the taxable estate grows.1 Only the value above the exemption is taxed, and the lowest brackets apply first, so a small estate just over the line owes far less than the top rate might suggest. The return is filed on Form OR-706.1

Here is the full rate schedule Oregon uses (set by statute in ORS 118.010). Find the row your Oregon taxable estate falls in: you owe that row's base tax, plus the row's marginal rate on the part of the estate above the row's lower figure.1

A worked example. Say an estate is worth $1,300,000. It sits in the first bracket, so the tax is the $0 base plus 10.0 percent of the $300,000 above $1,000,000, or about $30,000. A larger $3,000,000 estate lands in the third bracket: a $152,500 base plus 10.5 percent of the $500,000 above $2,500,000, for about $205,000.1 Because each bracket's base already folds in the lower brackets, no estate pays the top 16 percent rate on its whole value, only on the portion above $9,500,000. That is why a middle-class estate a little over the $1 million line owes a manageable amount, not a devastating one.

The table is not the whole computation, and this is where families overpay themselves on paper. If an Oregon resident owned real property or tangible personal property located outside Oregon on the date of death, ORS 118.010(5) multiplies the tax figured from that table by a ratio.1 The numerator is the value of the decedent's Oregon real property, Oregon tangible personal property and intangible personal property, leaving out any intangible property taxed by another state or country because of the death and the value of the exemption allowed under ORS 118.145. The denominator is the total gross estate, less that same exemption.1 In plain terms, Oregon taxes the Oregon-connected share, not the whole world. An Oregon retiree who also owns a condo in Arizona owes less than the bracket table alone produces, so if the worked examples above frighten you and part of your estate sits out of state, run the ratio before you conclude anything.

The executor files Form OR-706 and pays any tax within 12 months of the date of death for deaths on or after January 1, 2022.1 A six-month extension to file (Form OR-706 EXT) is available, but it does not extend the time to pay, so the tax itself is still due at 12 months.1 Mark the date early, because gathering appraisals and account statements for a $1 million-plus estate takes longer than families expect.

Married couples get an important break at the first death. Because Oregon's taxable estate is the federal taxable estate with Oregon adjustments, Oregon honors the federal marital deduction: property you leave to your surviving spouse is generally deducted, so most married couples owe no Oregon estate tax when the first spouse dies.1

The catch comes at the second death, because Oregon does not offer portability. The exemption is not portable between spouses, so the surviving spouse cannot add a late spouse's unused $1 million exemption to their own and has only their own $1 million to shield the combined estate.1 Oregon also offers a special marital property election: when the executor makes it, the value of Oregon special marital property is subtracted from the first spouse's Oregon taxable estate, and that property is then added back to the surviving spouse's Oregon taxable estate at the second death, unless it is already in the federal taxable estate.1 For combined assets well over $1 million, the non-portable exemption is exactly the kind of gap that trust planning is built to address. It is worth raising with an estate attorney while both spouses are living.

Why the Million-Dollar Threshold Catches So Many

A million dollars sounds like a lot until you add up what a long-time Oregon homeowner actually owns. A house bought decades ago in Portland, Bend, or along the coast can be worth well over half a million dollars on its own. Stack a 401(k) or IRA, some savings, a car, and a life insurance policy on top, and the estate clears the $1 million filing threshold without the person ever feeling wealthy.1

Because the exemption is frozen and not adjusted for inflation, this only gets more common.1 An estate that was safely under the line ten years ago may be over it today purely because the house appreciated. That is why Oregon's estate tax reaches squarely into the middle class, and why it is worth a hard look rather than an assumption that it does not apply to you.

It also helps to know what counts. The taxable estate generally includes the home and any other real estate, bank and brokerage accounts, retirement accounts like IRAs and 401(k)s, the death benefit of life insurance the deceased owned, business interests, vehicles, and personal property. It is the gross value of what the person owned or controlled at death, not just liquid savings. People often forget the life insurance death benefit counts toward their own estate when they owned the policy, and that single item can push an estate that looked safe over the $1 million line on its own.1

If your estate is anywhere near $1 million, the planning is worth doing while you can still do it.1 This guide is general information, not legal or tax advice, and an estate attorney can tell you what actually counts toward the threshold in your case.

Estate Tax Is Not Inheritance Tax

These two terms get used interchangeably, but they are not the same, and the difference decides who pays.

An estate tax is paid by the estate, out of the deceased person's assets, before anything is distributed. An inheritance tax is paid by the heirs, on what each receives, after distribution. Oregon's current death tax is the first kind, and there is no Oregon inheritance tax for a death today. The Department of Revenue draws the line by date and by form: "Form OR-706 must be filed for dates of death on or after January 1, 2012; Oregon Form IT-1, Oregon Inheritance Tax Return, must be filed for dates of death before January 1, 2012."1 So if you inherit from an Oregon estate today, the bill was the estate's and was settled on Form OR-706 before you received anything. The one case where the old inheritance return still matters is an estate being cleaned up for a death that occurred before 2012, which does happen.

For heirs, that means the estate transfer tax can shrink what is left to divide, but it does not put a separate bill in each beneficiary's lap.

Not the Federal Tax, Not Medicaid Recovery

Two other things get confused with Oregon's estate tax. Both are different, and the distinction matters.

The federal estate tax is separate, and its exemption is far higher. The federal basic exclusion amount is $15 million per decedent for deaths in 2026, fifteen times Oregon's $1 million threshold, and lifetime taxable gifts count against it.2,1 Being under the federal exclusion does not mean no death tax is owed: an estate that owes nothing to the IRS can still owe a state estate tax, which is why federal Form 706 allows a deduction for estate taxes paid to a state.2 The federal tax is filed on Form 706 and Oregon's on Form OR-706, so owing nothing federally tells you nothing about whether you owe Oregon.

Medicaid estate recovery is not a tax at all. It is the process by which a state seeks repayment from the estate of someone who received certain Medicaid-funded long-term care. It applies to a different group of people, for a different reason, under separate rules. If a parent received Medicaid-paid nursing home care, the concern is recovery, not the estate tax. We cover it fully in Medicaid estate recovery; the similar name does not make them the same thing.

Learn More

These guides go deeper on planning, the home as an asset, and the separate question of Medicaid recovery:

Next Steps

Add up the home, the accounts, and the life insurance, and see whether the total clears the $1 million filing threshold.1 If it is close, get an estate attorney involved early, because Oregon's frozen $1 million threshold catches more families than most people expect.

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The information on Brevy.com is for educational purposes only and is not a substitute for professional legal, financial, or medical advice. Rules vary by state and program and change frequently. Always verify with the relevant agency or a qualified professional. Brevy is not a law firm, financial advisor, or healthcare provider.