Who can I name as beneficiary on the plan?
Anyone can be a beneficiary, regardless of age. Your beneficiary can be your child, grandchild, nephew, niece, or even yourself.
Is my beneficiary required to attend an Oregon college or university?
No. Beneficiaries of Oregon college savings plans can attend any eligible educational institution in the U.S. and abroad, including vocational schools, technical schools, two- and four-year colleges and graduate schools.
How many accounts can I own?
As an account owner, you can own an account in both the Oregon College Savings Plan and the MFS 529 College Savings Plan for the same beneficiary.
How many accounts can a beneficiary have in his/her name?
A beneficiary can have one account in his/her name per owner, but each account owner can choose as many different investment options as desired. The total balance of all accounts for a single beneficiary cannot exceed $310,000. This includes accounts owned by more than one individual for the same beneficiary in both the Oregon College Savings Plan and the MFS 529 College Savings Plan.
What if my beneficiary decides not to go to college?
If your beneficiary decides not to attend college, you have three options:
You can continue to let the assets grow tax free, since there are no age restrictions on the investments in the 529 plans.
You can change the beneficiary at any time, as long as the new beneficiary is a family member of the current beneficiary.
You can take a nonqualified withdrawal, and the earnings will be taxed at the account owners' ordinary income-tax rate in addition to a 10% federal tax.
What if my beneficiary receives a scholarship?
You can withdraw an amount equal to the value of the scholarship from your account without being subject to the 10% additional federal tax. However, the earnings will be taxed at the account owner's ordinary income-tax rate if not used for qualified expenses not covered by the scholarship (such as books and other required supplies). You can also leave the money in the account and/or change the beneficiary.
How much can I contribute to an Oregon 529 college savings plan?
There is no contribution limit. However, once the total balance of all accounts for a single beneficiary reaches $310,000, no more contributions can be made for that beneficiary until the total amount drops below $310,000.
What is the minimum contribution to an Oregon 529 college savings plan?
The minimum investment to open an account is $25.
Are earnings and withdrawals state or federally tax-free?
If used for Qualified Higher Education Expenses, investment earnings and withdrawals are both state and federally tax-free.
What are Qualified Higher Education Expenses?
Qualified Higher Education Expenses include tuition, fees, books, supplies and equipment required for the enrollment or attendance of a designated beneficiary at an eligible educational institution. Qualified expenses also include expenses for special needs services in the case of a special needs beneficiary who incurs such expenses in connection with enrollment or attendance at an eligible educational institution. Also included as a qualified higher education expense is an amount for the room and board a student incurs while attending an institution at least half-time.
Is there an Oregon State tax deduction on contributions each year?
Yes. The allowable state tax deduction for tax year 2015 is $4,600 for joint filers and $2,300 for single and all other filers. However, as cited in ORS 316.699(3)(a) & (b), these amounts are adjusted annually according to the U.S. City Average Consumer Price Index.
If I participate in a 529 college savings plan that is not managed by the State of Oregon, can I still take the state tax deduction?
No. The Oregon State tax deduction applies only to plans managed by the State of Oregon. Those plans are the Oregon College Savings Plan and the MFS 529 Savings Plan.
Who is eligible to take the Oregon state tax deduction?
Anyone who pays Oregon State taxes and contributes to a 529 plan managed by the State of Oregon can take a tax deduction for contributions of up to $2,300 per year for single filers and $4,600 per year for joint filers.
If I contribute $4,600 to an Oregon 529 plan and my spouse contributes $4,600 to an Oregon 529 plan, are we both eligible for the $4,600 state tax deduction?
No. $4,600 is the maximum deduction couples can take per tax return, per year. A $2,300 tax deduction can be taken per person if married and filing separately.
Is there an income ceiling for taking the Oregon State tax deduction when contributing to an Oregon 529 college savings plan?
No. There are no income limits.
What is the contribution deadline for the Oregon state tax deduction?
Contributions can be made up to April 15 for a deduction in the previous tax year, or prior to filing your state tax return, whichever is earlier.
Can I open an Oregon 529 college savings plan for a beneficiary who does not live in Oregon? If yes, will my contributions to that plan be eligible for the Oregon State tax deduction?
Yes. The beneficiary of an Oregon 529 college savings plan can live in any state and can use the 529 savings to attend an eligible educational institution anywhere in the United States or abroad. If you pay Oregon income taxes, contributions to an Oregon plan for an out-of-state beneficiary are eligible for the state tax deduction.
Must I be the account owner to claim the Oregon State tax deduction for contributions to an Oregon 529 college savings plan?
No. Anyone who contributes to an Oregon 529 college savings account and pays Oregon income taxes is eligible to take the allowable state tax deduction for their contributions (For 2015: $2,300 for single filers and $4,600 for married couples filing jointly).
If I open an account for more than one beneficiary, can I take the state tax deduction for each beneficiary?
No. The maximum state tax deduction allowed in 2015 is $2,300 for single or married filing separately filers and $4,500 for married people filing jointly. This amount can include contributions to more than one account, but the total deduction cannot exceed the maximum allowed.
If I contribute more than the maximum state tax deduction amount to my Oregon 529 plan in one year, can I use the remainder towards the state tax deduction in the following years?
Yes. You can roll forward any contribution in excess of the yearly maximum allowed for up to four succeeding years. This process can be repeated for a new lump sum contribution every five years.
Since the state tax deduction is adjusted every year for inflation, the allowable adjusted amount for the current tax year is the amount that can be claimed when rolling excess contributions forward from previous years. Therefore, the amounts claimed in each of the five years will most likely be different.
When rolling contributions forward, the account must maintain a minimum balance of the amount that will be claimed for the current tax year through December 31 of the current tax year.