Is there an Oregon income tax deduction?
Yep. But only on contributions made prior to December 31, 2019. The Oregon College Savings Plan is moving to a tax credit starting January 1, 2020. If you file an Oregon income tax return, contributions made to your account before the end of 2019 are deductible up to a certain limit. For 2019, individual taxpayers are allowed to deduct $2,435 ($4,865 if filing jointly) for contributions made to any account in the Oregon College Savings Plan. You may also carry forward a balance over the following four years for contributions made before the end of 2019.
Note: Recapture provisions apply. This means that if you withdrew funds for non-qualified expenses from your Oregon College Savings Plan account and you claimed a tax benefit for that year’s contribution, the state of Oregon will recapture any Oregon State income tax benefits that you had accrued on the principal portion of that withdrawal. Read through our Plan Disclosure Booklet (PDF) for more info.
Worth noting, any funds that you plan to roll over from another 529 College Savings Plan are considered “new contributions” and will count towards the limit you’re allowed to deduct in a given tax year. It’s best to contact a tax advisor if you’re still unsure about what your tax implications might be.