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Plan Details & Information

When you pay fewer taxes, you can earn more and grow your account faster — giving your child or grandchild an even bigger head start.

See the difference these tax advantages can make over time in the table below.

Benefits of Tax-Free Growth: Taxable = $46,788, Tax-Free = $54,958 over 18 years

This example assumes an initial investment of $5,000, monthly contributions of $100, and a 6% annual rate of return over 18 years. The taxable account assumes a 28% federal and 5% state tax rate. The illustration is for illustrative purposes only and does not represent the performance of any specific portfolio.

Federal Income Tax Benefits

As a 529 Plan, the Oregon College Savings Plan offers unsurpassed income tax benefits. Although contributions are not deductible on your federal tax return, any investment earnings can grow tax-deferred, and distributions to pay for the beneficiary’s college costs come out federally tax-free.

Estate Tax Planning Benefits

There’s another tax advantage unique to the 529 plan. There’s no federal gift tax on contributions up to $14,000 per year for single filers and $28,000 for married filers. There’s even an option to gift amounts up to $70,000 for single filers and up to

$140,000 for married filers if pro-rated over 5 years. This means you could make a one-time gift equivalent to the 5 year amount and it could all qualify for the federal gift tax exclusion. Consult your tax advisor.

State Income Tax Information

In addition to federal tax benefits, there are state tax benefits as well. For the Oregon College Savings Plan, tax treatment is as follows:

Contributions are deductible for Oregon income tax purposes up to annual limits that are indexed annually for inflation. For 2017, the total deduction on all accounts in the Network is $4,660 for taxpayers filing jointly and $2,330 for all others. Amounts exceeding the contribution deduction limits may be carried forward for up to four succeeding tax years. Rollovers from other states’ 529 plans into an Account in the Plan are considered new contributions and qualify for the contribution deduction.

Earnings from the account are not included in Oregon taxable income. Qualified Withdrawals and certain Taxable Withdrawals are not subject to Oregon income tax. Oregon tax benefits related to the Oregon College Savings Plan are available only to Oregon tax payers. You should talk to a qualified advisor about how Oregon tax provisions affect your circumstances.


Category: Savings

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