SECTION 710:50-15-66. Deduction for contributions to an Oklahoma College Savings Plan

(a)   For tax years beginning after December 31, 2001 and ending before December 31, 2004, individuals may deduct up to Two Thousand Five Hundred Dollars ($2,500.00) of contributions made to an Oklahoma 529 College Savings Plan Account, established pursuant to the Oklahoma College Savings Act, in arriving at Oklahoma taxable income. If contributions are made to more than one account, the deduction for each contributor is limited to Two Thousand Five Hundred Dollars ($2,500.00) for each account.

(b)   Effective for tax years beginning after December 31, 2004, for contributions made to an Oklahoma 529 College Savings Plan (established pursuant to the Oklahoma College Savings Act) a maximum of Ten Thousand Dollars ($10,000,00) may be deducted in arriving at Oklahoma Taxable income [Twenty Thousand Dollars ($20,000.00) if filing an income tax return using married filing joint filing status].

(c)   Contributions made to other states' college savings plans, the Coverdell Education Savings Account, or transfers from one Oklahoma College Savings Plan Account to another may not be deducted.

(d)   Any contribution, to the extent not deducted, may be carried over as a deduction from income for the succeeding five (5) years.

(e)   For taxable years beginning after December 31, 2005, deductions may be taken for contributions and rollovers made during a taxable year and up to April 15^th of the succeeding year, or the due date of a taxpayer's state income tax return excluding extensions, whichever is later. Provided a deduction for the same contribution may not be taken for two (2) different taxable years.

(f)   For tax years beginning on or after January 1, 2007, taxpayers who elect the five-year carryforward election and take a rollover or have a non-qualified withdrawal during the five-year carryforward period, must reduce the otherwise available tax deduction by the amount which is equal to the rollover or non-qualified withdrawal.

(g)   For tax years beginning on or after January 1, 2007, taxpayers who elect to take a rollover or non-qualified withdrawal within the same tax year in which a contribution was made to the taxpayer's account must reduce the otherwise available tax deduction by the amount which is equal to the rollover or non-qualified withdrawal.

(h)   For tax years beginning on or after January 1, 2007 taxpayers who elect to take a rollover within one year of the date of contribution for which a deduction has been taken must include the amount of the rollover in their adjusted gross income the taxable year of the rollover.

(i)   For tax years beginning on or after January 1, 2007 taxpayers who make a non-qualified withdrawal of contributions for which a deduction was taken must include the amount of the non-qualified withdrawal and any earnings thereon in their adjusted gross income in the taxable year of the withdrawal

(j)   Definitions. The following words and terms, when used in this Section, shall have the following meaning, unless the context clearly indicates otherwise:

(1)   "Non-qualified withdrawal" means a withdrawal from an Oklahoma College Savings Plan account that is not:

(A)   a qualified withdrawal;

(B)   a withdrawal made as a result of the death or disability of the designated beneficiary of an account;

(C)   a withdrawal that is made on the account of a scholarship or the allowance or payment described in Section 135(d)(1)(B) or (C) of Title 26 of the Internal Revenue Code, received by the designated beneficiary to the extent the amount of the refund does not exceed the amount of the scholarship, allowance, or payment; and

(D)   a rollover or change of designated beneficiary as permitted by subsection F of Section 3970.7 of Title 70 of Oklahoma Statutes.

(2)   "Rollover" means any transfer of funds from an Oklahoma College Savings plan to any other plan under Section 529 of the Internal Revenue Code.

[Source: Added at 20 Ok Reg 2165, eff 6-26-03; Amended at 23 Ok Reg 2824, eff 6-25-06; Amended at 24 Ok Reg 2359, eff 6-25-07; Amended at 25 Ok Reg 728, eff 12-27-07 (emergency); Amended at 25 Ok Reg 2056, eff 7-1-08]