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Big Changes to Oregon 529 and ABLE Accounts

With the passage of HB 2164 during the 2019 Legislative Session, the deadline to make contributions to a 529 College Savings Plan or an ABLE account and still qualify for the subtraction on your 2019 personal income tax return is December 31, 2019.

Tax year 2019 is the last year the contributions will qualify for the subtraction; however, contributions made in 2019 and prior can still be carried forward up to four years.

Contributions made January 1, 2020 and forward will qualify for the new 529/ABLE account refundable credit. The refundable credit amount is based on filing status and adjusted gross income (AGI). The deadline to make the contributions for the new refundable credit is the earliest of the filing due date, without regards to extension, or the date the return is filed. The credit is the lesser of $300 (MFJ), $150 for all other filing statuses, or:

  1. The amount contributed, if the taxpayer’s adjusted gross income does not exceed $30,000;
  2. 50 percent of the amount contributed, if the taxpayer’s adjusted gross income exceeds $30,000 but does not exceed $70,000;
  3. 25 percent of the amount contributed, if the taxpayer’s adjusted gross income exceeds $70,000 but does not exceed $100,000;
  4. 10 percent of the amount contributed, if the taxpayer’s adjusted gross income exceeds $100,000 but does not exceed $250,000; or
  5. 5 percent of the amount contributed, if the taxpayer’s adjusted gross income exceeds $250,000.

The revenue department will review annually and make adjustments to the credit and income thresholds.  The credit can be carried forward, but not past January 1, 2026 which is when the credit is set to expire.

Under the new law, both your income and the amount you want to contribute will play a big part in when the contribution can or should be made.  You should consult with your tax advisor and begin planning for the changes.

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