(2) The amount of the credit allowed under this section shall be limited based on the taxpayer’s adjusted gross income and shall be the lesser of $300, if reported on a joint return, or $150, if reported on any other type of return, or the following:
(a) The amount contributed, if the taxpayer’s adjusted gross income does not exceed $30,000;
(b) 50 percent of the amount contributed, if the taxpayer’s adjusted gross income exceeds $30,000 but does not exceed $70,000;
(c) 25 percent of the amount contributed, if the taxpayer’s adjusted gross income exceeds $70,000 but does not exceed $100,000;
(d) 10 percent of the amount contributed, if the taxpayer’s adjusted gross income exceeds $100,000 but does not exceed $250,000; or
(e) 5 percent of the amount contributed, if the taxpayer’s adjusted gross income exceeds $250,000.
(3)(a) The Department of Revenue shall annually adjust the maximum credit amounts allowable under this section according to the cost-of-living adjustment for the calendar year. The department shall first make this adjustment for a joint return by multiplying the maximum credit amount in subsection (2) of this section by the percentage (if any) by which the monthly averaged U.S. City Average Consumer Price Index for the 12 consecutive months ending August 31 of the prior calendar year exceeds the monthly averaged U.S. City Average Consumer Price Index for the 12 consecutive months ending August 31, 2018.
(b) As used in this subsection, "U.S. City Average Consumer Price Index" means the U.S. City Average Consumer Price Index for All Urban Consumers (All Items) as published by the Bureau of Labor Statistics of the United States Department of Labor.
(c) If any adjustment to the maximum credit amount for a joint return, as determined under paragraph (a) of this subsection, is not a multiple of $20, the adjustment shall be rounded to the next lower multiple of $20. The department shall then adjust the maximum credit amount for all other types of returns so that it is half the maximum credit amount for a joint return.
(4) A credit under this section is allowed for a preceding tax year for amounts contributed to a savings network account for higher education or to an ABLE account if the contribution is made before the taxpayer files a return or before the 15th day of the fourth month following the closing of the taxpayer’s tax year, whichever is earlier.
(5) A credit is not allowed under this section for any amount that has been transferred into a savings network account for higher education from an individual development account, through a rollover, as provided in ORS 458.685 (3)(a)(A).
(6) If the amount allowable as a credit under this section, when added to the sum of the amounts allowable as payment of tax under ORS 316.187 (withholding), ORS 316.583 (estimated tax), other tax prepayment amounts and other refundable credit amounts, exceeds the taxes imposed by ORS chapters 314 and 316 for the tax year (reduced by any nonrefundable credits allowable for purposes of ORS chapter 316 for the tax year), the amount of the excess shall be refunded to the taxpayer as provided in ORS 316.502.
(7) The credit shall be claimed on a form prescribed by the Department of Revenue that contains the information required by the department.
(8) Spouses in a marriage who file separate returns for a taxable year may each claim a share of the tax credit that would have been allowed on a joint return in proportion to the adjusted gross income of each.
(9) In the case of a credit allowed under this section:
(a) A nonresident shall be allowed the credit in the proportion provided in ORS 316.117.
(b) If a change in the status of the taxpayer from resident to nonresident or from nonresident to resident occurs, the credit shall be determined in a manner consistent with ORS 316.117.
(c) If a change in the taxable year of the taxpayer occurs as described in ORS 314.085, or if the department terminates the taxpayer’s taxable year under ORS 314.440, the credit shall be prorated or computed in a manner consistent with ORS 314.085. [2019 c.579 §2; 2021 c.525 §14]
Note: Section 5, chapter 579, Oregon Laws 2019, provides:
Sec. 5. Sections 2 [315.650] and 3 [315.653] of this 2019 Act apply to tax years beginning on or after January 1, 2020, and before January 1, 2026. [2019 c.579 §5]