Parents Reap Tax Savings Benefits With The Oregon 529 Tax Deduction

Parents can reap the benefits of an Oregon 529 tax deduction by investing in a college savings plan for their child's educational future. The Oregon College Savings Plan allows a $4,000 state tax deduction each year for married couples who file jointly. Single filers receive a $2,000 Oregon 529 tax deduction.

The following information outlines the additional advantages and important rules regarding the tax deduction.

You can only take advantage of the Oregon 529 tax deduction through plans that are managed by the state of Oregon. These include the Oregon College Savings Plan, the Oppenheimerfunds 529 Plan, and the MFS 529 Savings Plan. Additionally, you must be an Oregon state tax payer to receive the deduction.

There are no income limits for taking the Oregon 529 tax deduction. The deadline to make contributions to either 529 savings plan is April 15 to receive the Oregon 529 tax deduction for the previous tax year.

Even though you must be an Oregon state tax payer to benefit from the deduction, the beneficiary of the 529 college savings plan does not have to be an Oregon resident. He or she can live in any state and use the funds to attend any eligible institution in the United States or abroad.

Parents are not the only ones who can take advantage of the Oregon 529 tax deduction. A grandparent, aunts, uncles - anyone who makes contributions to an Oregon 529 college savings plan - is eligible to take the state tax deduction as long as they pay Oregon income taxes.

You may open a college savings account for more than one beneficiary, but you cannot claim the maximum Oregon 529 tax deduction for each beneficiary. The maximum state tax deduction can include contributions to more than one account, but the total cannot exceed the maximum allowed.

It is important to note that if you contribute more than the maximum allowed for the Oregon 529 tax deduction, you can roll forward the additional amounts for up to four years. The process can be repeated every five years.

Additionally, funds in an existing 529 plan can be rolled over into one of Oregon's 529 college savings plans. You must complete an account application and the Change of Trustee/Rollover from a 529 Plan form. Both forms are located on Oregon's college savings website. Mail both forms to Oppenheimerfunds after completion. OppenheimerFunds will request that the funds are transferred from the out-of-state account into the new Oregon account.