1. (1) If an unqualified withdrawal under ORS 315.653(1) is made from a 529 or ABLE account, the taxpayer who received tax benefit of the contribution must forfeit that benefit.

2. (2) To determine whether a forfeiture is necessary, the amount of non-benefit contribution must be determined.  The amount of non-benefit contribution is the total of:

   1. (a) Deposits into a 529 or ABLE account for which no corresponding tax benefit was received and;
   2. (b) Any interest earned in a 529 or ABLE account.
3. (3) The amount of unqualified withdrawal in excess of the non-benefit contribution calculated in section (2) is subject to recapture.

4. (4) The amount of the recapture is based on the tax benefit received on the most recent contribution and must be reported in the tax year in which the withdrawal took place.

   [ED. NOTE: To view attachments referenced in rule text, click here for PDF copy.]

Statutory/Other Authority

ORS 305.100 & 316.650

Statutes/Other Implemented

ORS 315.650

History

REV 1-2021, renumbered from 150-305-0065, filed 01/07/2021, effective 01/07/2021
REV 50-2020, adopt filed 12/24/2020, effective 01/01/2021