529 Plan Oregon
July 24th, 2010
Question: Do contributions to the Oregon state 529 Plan count as an itemized or standard deduction?
I’m trying to figure out what the tax savings are if I set up a 529 Plan through Oregon College Savings and make a $2000 contribution each year. This will help me decide if this is a better or worse option than setting up a 529 through Vanguard whose 529 Plan is with the state of Nevada.
Answer: You do not get a deduction on your federal return for contributions to a 529 Plan. The benefit of the 529 Plan is when the money is withdrawn. If it is used for education purposes, the earnings in the 529 Plan is tax free for federal tax purposes.
Depending on the state, there may be current tax benefits, but that depends on the state, and it also typically requires you to be resident in that state. For example, I live in NY. If I contribute to the NY 529 Plan, I can deduct the amount of the contributions, up to a maximum of $10,000 per year, on my NY state return. I do not get the deduction if I contribute the money to any other state’s 529 Plan, it has to be NY.
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