Legislature OKs new education savings tax credit
The promise of higher education and career training programs will be within reach for more Oregon families thanks to a new Education Savings Credit, under legislation that earned final legislative approval Sunday and now heads to the governor’s desk, Oregon’s state treasurer said.
House Bill 2164 authorizes the nation’s first refundable tax credit to help low- and moderate-income Oregon families save for their educational futures, through the Oregon College Savings Plan.
“We believe in kids from underrepresented communities, kids from rural Oregon, and every kid in our state who needs an opportunity,” said state Treasurer Tobias Read, whose office oversees the Oregon College Savings Plan. “Education and training after high school should be accessible to all Oregonians, regardless of their family’s zip code or the size of their bank account.”
Here’s the rest of the news release from the state treasurer’s office:
The proposal calls for the Education Savings Credit to go into effect in 2020. The new legislation allows families to receive an income tax credit of as much as $300 for contributions to the Oregon College Savings Plan. The incentive will be available to all Oregon taxpayers, and will equal a percentage of the dollars they save in College Savings Plan accounts, on a sliding scale based on financial need.
The legislation is a key part of Treasurer Read’s savings agenda and his top priority for the 2019 session. Since entering office in 2017, he has expanded and prioritized efforts to help Oregonians save for education, for disability-related costs, and for retirement.
Research shows that just having an Oregon College Savings Plan account makes a profound and positive difference: When a child has a College Savings account set up in her or his name, they are three times more likely to enroll in a job training or college program, and four times more likely to complete it.
Accounts can be opened by just about anyone—parents, family, friends, 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.
Launched in 2001, the Oregon College Savings Plan just celebrated a key milestone, with $2 billion saved.
The Oregon State Treasury improves the financial well-being of all Oregonians. We provide low-cost banking, debt management and investment programs for governments, and empower Oregonians to invest in themselves and their loved ones for a more secure future.
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The new model for distributing the tax incentive for contributions to a College Savings Plan (the current model provides a flat tax deduction to all contributors regardless of income):
Income Level
Refundable Credit – Joint Filers
Refundable Credit – Individual Filers
Making less than $30,000
100% of contributions
(up to a maximum of $300)
100% of contributions
(up to a maximum of $150)
Making between $30,001 and $70,000
50% of contributions
(up to a maximum of $300)
50% of contributions
(up to a maximum of $150)
Making between $70,001 and $100,000
25% of contributions
(up to a maximum of $300)
25% of contributions
(up to a maximum of $150)
Making between $100,001 and $250,000
10% of contributions
(up to a maximum of $300)
10% of contributions
(up to a maximum of $150)
Making more than $250,000
5% of contributions
(up to a maximum of $300)
5% of contributions
(up to a maximum of $150)
