Nonresidents stationed in Oregon. Oregon doesn’t tax your military pay while you’re stationed in Oregon. File Form OR-40-N if you had other income from Oregon sources or to claim a refund of Oregon tax withheld from your military pay.
Military spouses. Federal law does not allow Oregon to tax your wages if you’re in Oregon only to be with your spouse who is stationed in Oregon. If you’re domiciled in Oregon and your spouse is a resident of another state, federal law allows you to choose to be treated for tax purposes as a resident of your spouse’s state. File Form OR-40-N if you had other income from Oregon sources or are claiming a refund of Oregon tax withheld.
Residents (or Oregon-domiciled service members) stationed outside of Oregon. If you meet the requirements for special-case Oregon residents or Oregon residents living abroad, file Form OR-40-N. File Form OR-40 if you don’t meet those requirements.
Residents (or Oregon-domiciled service members) stationed in Oregon. Your pay is subject to tax, although the pay could qualify for certain subtractions. For more information on subtractions available to military personnel, see Publication OR-17.
Military personnel on active service in Oregon are treated as nonresidents for tax purposes if their address in the payroll records of the Defense Finance and Accounting System (DFAS) is outside Oregon, regardless of where they are domiciled (ORS 316.027).