Oregon College Savings Plan to offer tax credit

Replaces previous state tax deduction

SALEM, Ore. (KTVZ) -- Starting in 2020, all Oregon families will be eligible to receive a refundable tax credit when they contribute to an Oregon College Savings Plan account.

This first-in-the-nation refundable tax credit, which goes into effect on Jan. 1, replaces the state tax deduction, making it more advantageous for low-to-middle-income families to save for community college, four-year university, and certified job training.

Treasurer Tobias Read praised the new law. “This change really underscores that the Oregon College Savings Plan is for every kid in Oregon. That’s why we want to make sure that every family in Oregon can benefit from saving for higher education.”

Research shows that kids with a college savings account are more likely to go to college and more likely to graduate. “With the Education Savings Credit, we can make higher education and job training more accessible and make a dent in the crushing load of student debt,” said Treasurer Read.

Accounts can be opened by parents, family, friends, and even future students. Money saved in the Oregon College Savings Plan grows tax-free and can be used for qualified expenses at any accredited post-secondary institution or trade school. Learn more about the Oregon College Savings Plan and how to open an account here: oregoncollegesavings.com.

Under the Education Savings Credit, families who contribute to their Oregon College Savings Plan account in 2020 will receive an income tax credit when they file their taxes in 2021. The size of the credit is determined by a sliding scale based on income. The change was made possible by House Bill 2164, signed by Governor Brown on July 23.