Forfeiture of prior tax relief; disallowed withdrawal or distribution.

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(a) A nonqualified withdrawal from an account, as defined in ORS 178.300;

(b) A withdrawal from a savings network account for higher education established under ORS 178.300 to 178.360 to pay expenses in connection with enrollment or attendance at an elementary or secondary school; or

(c) A distribution from an ABLE account that is not a qualified disability expense of the designated beneficiary as provided in ORS 178.375 and 178.380 and rules adopted by the Oregon 529 Savings Board.

(2) A taxpayer shall report the amount of a disallowed withdrawal or distribution in the tax year in which it is taken, and shall remit the taxes due as a result of the forfeited credit. The Department of Revenue shall by rule determine the calculation of forfeited credit amounts.

(3) If a taxpayer does not report a disallowed withdrawal or distribution in the tax year that it is taken, and notwithstanding ORS 314.410, the department shall proceed to collect those taxes, including penalties and interest, not paid by the taxpayer as a result of the tax credit allowed the taxpayer. [2019 c.579 §3]


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