How the Oregon 529 Tax Credit Works

The Oregon 529 tax credit provides an incentive for state residents to save for future educational pursuits. This state-level tax benefit encourages contributions to the official Oregon College Savings Plan by offering a direct reduction in state tax liability. The credit is structured to benefit a range of income levels, helping to offset the costs associated with post-secondary schooling.

Eligibility Rules and Credit Amounts

The value of the Oregon college savings credit is tied to a taxpayer’s filing status and modified adjusted gross income (AGI). For the 2025 tax year, married couples filing a joint return can receive a maximum credit of $360, while all other filers are eligible for a maximum of $180.

The percentage of your contribution that qualifies for the credit decreases as your income rises. For example, joint filers with a modified AGI of $30,000 or less can claim a credit equal to 100% of their contribution, up to the $360 maximum. This percentage scales down as income increases, meaning higher earners must contribute more to receive the same credit amount.

For instance, a married couple with an AGI between $70,001 and $100,000 can claim a credit equal to 25% of their contribution. To receive the full $360 credit, they would need to contribute $1,440. Taxpayers with a modified AGI over $250,000 can claim a credit equal to 5% of their contribution, requiring a $7,200 contribution to get the full $360 credit.

Making a Qualifying Contribution

To qualify for the tax credit, you must deposit funds into an Oregon College Savings Plan account, as contributions to 529 plans in other states are not eligible. To claim the credit for a specific tax year, your contribution must be made by the filing deadline, which is typically April 15th of the following year. For example, a contribution made on April 1, 2026, can be applied toward your 2025 tax credit.

The plan allows for small initial investments, with minimums as low as $25 to open an account. You can make contributions on behalf of any beneficiary—a child, grandchild, or even yourself—and still be eligible to claim the credit on your own Oregon tax return. The person making the contribution receives the tax credit, not the account owner or the beneficiary, if they are different people.

How to Claim the Credit on Your Tax Return

Once you have made a qualifying contribution, the credit is claimed on your Oregon state income tax return. You will need to complete Schedule OR-ASC, the form used for most state credits, and file it with your primary Form OR-40 or OR-40-N.

On Schedule OR-ASC, you will report your contribution and calculate the credit you are eligible for based on your AGI and filing status. The calculated credit amount is then transferred to your main Oregon tax form, directly reducing the state tax you owe. Because the credit is refundable, if the credit amount is more than your tax liability, the state will refund you the difference.

Legacy Carryforward Provision for Pre-2020 Contributions

Oregon law previously allowed a state income tax deduction for 529 plan contributions. That system allowed taxpayers who contributed more than the annual limit to carry forward the excess amount for deductions in future years.

This carryforward provision only applies to contributions made before December 31, 2019, as it is a legacy rule. The current tax credit, which replaced the deduction, does not have a carryforward feature. Taxpayers with a carryforward balance from contributions made in 2019 or earlier can continue to claim their remaining deduction until it is used up.