You can subtract all active duty pay earned outside Oregon during the year plus up to $6,000 active duty pay earned in Oregon. Note: Your total subtraction cannot be more than your total taxable active duty pay income.
Guard and reserve annual training, weekend drills, and inactive duty training ARE ELIGIBLE for this subtraction. If you're in the Guard or Reserves and your Form W-2 (W2) does not show a separate amount for active duty, contact your paymaster.
For more information, go to the Military personnel filing information section of the Oregon Department of Revenue website.
Example: Barry, an Oregon resident, enlisted in the Army in 2000. From January to August 2012, he was stationed at Fort Lewis, Washington. He earned $24,000 active duty pay there. From August until the end of the year, he served in Oregon as a recruiter. He earned $12,000 in Oregon. He can subtract the $24,000 earned outside Oregon and $6,000 of the income earned in Oregon, for a total subtraction of $30,000.