A first-time buyer account can be set up by anyone
planning to purchase a home in Oregon before January 1, 2027. The person can’t
have owned or purchased a residence in the three years prior to the date of their
Yes. If you don't purchase a home in Oregon, you don't qualify for the subtraction and you will be required to add back any amounts you subtracted on previous tax returns. You may also be subject to a penalty on funds withdrawn for a non-qualifying purpose.
Yes. You must be a resident of Oregon.
The maximum subtraction allowed is $5,000 per year ($10,000 if you have a joint first-time buyer account and you file a joint tax return). You may subtract a total of $50,000. Income limitations do apply. If your income is over $104,000 ($149,000 for joint filers), the amount of the subtraction is reduced. Please see Publication OR-17 for more details.
You can subtract both your contributions to the first-time buyer account and earnings from that account (interest and dividends). However, if your earnings and contributions exceed the maximum amount allowed, you must report the excess earnings on your Oregon return.
You're allowed to transfer the funds in any first-time buyer account to any other first-time buyer account without reporting it as income or incurring a penalty. The original first-time buyer account must be closed before you can open the second account and the funds must be transferred within 60 days of closing the original account. You can't have two first-time buyer accounts open at the same time.
You're allowed to transfer funds in any first-time buyer account to any other first-time buyer account(s) without reporting it as income or incurring a penalty. Keep in mind, once you don’t have a joint first-time buyer account, you no longer qualify for the $10,000 subtraction. Your subtraction will be limited to $5,000, even if you continue to file a joint tax return.
Individuals are allowed a subtraction of up to $5,000 per year if they own a first-time buyer account. The $5,000 limit includes contributions made to the account plus any earnings the account accumulates over the calendar year. Individuals who file a joint tax return, and each hold a first-time buyer account, qualify for a maximum $10,000 subtraction per year.
Yes. However, they won't be able to claim a subtraction for any funds they contribute to you. In addition, you won't be able to claim a subtraction for contributions you don’t personally make. You will be able to claim a subtraction for any earnings (interest or dividends) in the account.
Funds in your first-time buyer account can be used for down payments, loan origination charges, appraisal fees, credit report fees, flood certifications, title charges, deed charges, and other closing costs on your settlement statement when purchasing a single-family home.
The funds in the account must be used to purchase a home within 10 years of opening a first-time homebuyer savings account. If funds are withdrawn within 10 years of opening the account for a reason other than buying a home, you will be required to pay a penalty. In addition, if you remove the funds at any time without purchasing a home, you'll need to claim the amounts you previously subtracted as an addition on your tax return. The addition to your income occurs in the year that you removed the funds from the first-time buyer account for a nonqualifying purpose (for example, you remove the funds to pay for college tuition).
The penalty is 5 percent of the funds withdrawn from the first-time buyer account. The penalty isn't associated with subtractions you claimed. For example, in calendar year 2019 you contributed $5,000 to a first-time buyer account and claimed a $5,000 subtraction on your 2019 tax return. You also earned interest in your account of $50. You're unable to subtract the $50 interest earnings because you already claimed the maximum subtraction of $5,000. Example two: In calendar year 2020, you decide to withdraw all of the funds in your first-time buyer account to pay for college tuition. Your penalty would be $252.50 ($5,050 x 5%). In addition, you're required to add back $5,000 on your 2020 tax return for the subtraction you previously claimed.
The penalty will be imposed on funds withdrawn within 10 years of the first-time home buyer savings account being opened and used for a nonqualifying purpose.
Yes. The penalty won't be imposed on funds that are withdrawn if a person has died, has filed for protection under the U.S. Bankruptcy Code, or has lost function of any portion of the body that permanently incapacitates them from regularly performing work at a gainful occupation. Also, if the funds are withdrawn more than 10 years after the account is opened, they won't be subject to a penalty. However, you'll still be required to add back any previously subtracted contributions and earnings.
Yes. Although deposits and earnings to the first-time buyer account are exempt from state taxes up to the annual limit, they're still subject to federal taxes, depending on your individual tax situation.