Active-duty and reserve pay
Residents stationed outside Oregon are not taxed on military pay. Those stationed in Oregon may subtract up to $6,000.
An E-5 with over 6 years of service earns $49,320 a year in basic pay. If those conditions are met, Oregon does not tax it. If not, the full $49,320 counts as Oregon income. Housing and food allowances are never taxed by any state.
Military retired pay
Military retired pay is taxed, except the part earned for service before October 1991.
Your state of legal residence decides
Military pay is taxed by your state of legal residence, usually the state you lived in when you joined or one you later adopted by changing your records, not by the state where you are stationed. This comes from the Servicemembers Civil Relief Act. Spouses can choose to use the member's state of legal residence for their own income too.
See your total pay with state tax
Questions
Does Oregon tax military pay?
Oregon exempts military pay only in certain cases, mainly when you are stationed outside the state. Residents stationed outside Oregon are not taxed on military pay. Those stationed in Oregon may subtract up to $6,000.
Does Oregon tax military retirement pay?
Military retired pay is taxed, except the part earned for service before October 1991.
Is BAH taxed in Oregon?
No. BAH and BAS are not taxable income for federal or state tax in any state.
Which state taxes me if I am stationed in Oregon?
Under the Servicemembers Civil Relief Act, your military pay is taxed only by your state of legal residence, not the state where you are stationed. If Oregon is not your legal residence, Oregon does not tax your military pay.