ORS 315.650¹
Higher education savings account or ABLE account contributions

(1) A credit against taxes otherwise imposed under ORS chapter 316 shall be allowed for amounts contributed by the taxpayer during the tax year to a savings network account for higher education established under ORS 178.300 (Definitions for ORS 178.300 to 178.360) to 178.360 (Consideration of amounts in accounts for higher education expenses in benefit eligibility determinations) or an ABLE account established under ORS 178.380 (Establishment of qualified ABLE program). A taxpayer who makes contributions to both types of account may claim the credit for the amounts listed in subsection (2) of this section for each type of account.

(2) The amount of the credit allowed under this section shall be limited based on the taxpayer’s adjusted gross income and shall be the lesser of $300, if reported on a joint return, or $150, if reported on any other type of return, or the following:

(a) The amount contributed, if the taxpayer’s adjusted gross income does not exceed $30,000;

(b) 50 percent of the amount contributed, if the taxpayer’s adjusted gross income exceeds $30,000 but does not exceed $70,000;

(c) 25 percent of the amount contributed, if the taxpayer’s adjusted gross income exceeds $70,000 but does not exceed $100,000;

(d) 10 percent of the amount contributed, if the taxpayer’s adjusted gross income exceeds $100,000 but does not exceed $250,000; or

(e) 5 percent of the amount contributed, if the taxpayer’s adjusted gross income exceeds $250,000.

(3)(a) The Department of Revenue shall annually adjust the maximum credit amounts allowable under this section according to the cost-of-living adjustment for the calendar year. The department shall first make this adjustment for a joint return by multiplying the maximum credit amount in subsection (2) of this section by the percentage (if any) by which the monthly averaged U.S. City Average Consumer Price Index for the 12 consecutive months ending August 31 of the prior calendar year exceeds the monthly averaged U.S. City Average Consumer Price Index for the 12 consecutive months ending August 31, 2018.

(b) As used in this subsection, “U.S. City Average Consumer Price Index” means the U.S. City Average Consumer Price Index for All Urban Consumers (All Items) as published by the Bureau of Labor Statistics of the United States Department of Labor.

(c) If any adjustment to the maximum credit amount for a joint return, as determined under paragraph (a) of this subsection, is not a multiple of $20, the adjustment shall be rounded to the next lower multiple of $20. The department shall then adjust the maximum credit amount for all other types of returns so that it is half the maximum credit amount for a joint return.

(4) A credit under this section is allowed for a preceding tax year for amounts contributed to a savings network account for higher education or to an ABLE account if the contribution is made before the taxpayer files a return or before the 15th day of the fourth month following the closing of the taxpayer’s tax year, whichever is earlier.

(5) A credit is not allowed under this section for any amount that has been transferred into a savings network account for higher education from an individual development account, through a rollover, as provided in ORS 458.685 (Approved purpose of account) (4)(a)(A).

(6) If the amount allowable as a credit under this section, when added to the sum of the amounts allowable as payment of tax under ORS 316.187 (Amount withheld is in payment of employee’s tax) (withholding), ORS 316.583 (Effect of payment of estimated tax or installment) (estimated tax), other tax prepayment amounts and other refundable credit amounts, exceeds the taxes imposed by ORS chapters 314 and 316 for the tax year (reduced by any nonrefundable credits allowable for purposes of ORS chapter 316 for the tax year), the amount of the excess shall be refunded to the taxpayer as provided in ORS 316.502 (Distribution of revenue to General Fund).

(7) The credit shall be claimed on a form prescribed by the Department of Revenue that contains the information required by the department.

(8) Spouses in a marriage who file separate returns for a taxable year may each claim a share of the tax credit that would have been allowed on a joint return in proportion to the adjusted gross income of each.

(9) In the case of a credit allowed under this section:

(a) A nonresident shall be allowed the credit in the proportion provided in ORS 316.117 (Proration between Oregon income and other income for nonresidents, part-year residents and trusts).

(b) If a change in the status of the taxpayer from resident to nonresident or from nonresident to resident occurs, the credit shall be determined in a manner consistent with ORS 316.117 (Proration between Oregon income and other income for nonresidents, part-year residents and trusts).

(c) If a change in the taxable year of the taxpayer occurs as described in ORS 314.085 (Taxable year), or if the department terminates the taxpayer’s taxable year under ORS 314.440 (Tax as debt), the credit shall be prorated or computed in a manner consistent with ORS 314.085 (Taxable year). [2019 c.579 §2]

Note: Section 5, chapter 579, Oregon Laws 2019, provides:

Sec. 5. Sections 2 [315.650 (Higher education savings account or ABLE account contributions)] and 3 [315.653 (Forfeiture of prior tax relief)] of this 2019 Act apply to tax years beginning on or after January 1, 2020, and before January 1, 2026. [2019 c.579 §5]

Chapter 315

Notes of Decisions

State could not recalculate tax for tax year closed to review in order to prevent elective carry forward of tax credit to tax year subject to review. Smurfit Newsprint Corp. v. Dept. of Revenue, 329 Or 591, 997 P2d 185 (2000)

1 Legislative Counsel Committee, CHAPTER 315—Personal and Corporate Income or Excise Tax Credits, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ors315.­html (2019) (last ac­cessed May 16, 2020).
 
2 Legislative Counsel Committee, Annotations to the Oregon Revised Stat­utes, Cumulative Supplement - 2019, Chapter 315, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ano315.­html (2019) (last ac­cessed May 16, 2020).
 
3 OregonLaws.org assembles these lists by analyzing references between Sections. Each listed item refers back to the current Section in its own text. The result reveals relationships in the code that may not have otherwise been apparent. Currency Information