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529 plans are named after section 529 of the Internal Revenue Code—26 U.S.C. § 529.While most plans allow investors from out of state, there can be significant state tax advantages and other benefits, such as matching grant and scholarship opportunities, protection from creditors and exemption from state financial aid calculations for investors who invest in 529 plans in their state of ...
Here’s how to take full advantage of 529 college savings plans — and it’s not just parents who can enjoy the tax benefits either. Best 529 plans. These state plans offer college savers a ...
Opening a 529 plan is a tax-advantaged way to set aside money for college. The money you contribute can grow tax-deferred and qualified withdrawals are tax-free. While there is no federal tax ...
Many states provide a tax deduction or tax credit for residents using an in-state 529 plan. A 529 plan has an owner and a beneficiary, but they can be the same person. ... What Are the Benefits of ...
State. Tax Treatment of 529 Plan Contributions. California. No deduction or credit. Illinois. Maximum deduction of $10,000 ($20,000 for married joint filers) per year
Key takeaways. 529 plans are tax-advantaged accounts that allow a beneficiary to use the funds for qualified education expenses. Funds contributed to a 529 plan are allowed to grow tax-deferred.
As an additional tax benefit, 37 states and the District of Columbia offer an annual state tax credit or deduction for contributions to 529 college savings plans. Less tax can mean more money for ...
A 529 plan offers several other benefits, including the ability to invest with potentially high-return assets such as stock funds, instead of being limited to low-return bank accounts.