Tax Breaks from a 529 Savings Plan
By: Sid Kirchheimer
State-run “529 plans” offer several advantages over other college savings plans. In at least 32 states, the account owner (usually a parent) is eligible for a full or partial state income-tax deduction for money contributed to the plan. Some plans permit the purchase of credits at today’s prices that can be used years later—no matter how much tuition costs rise between now and then. These plans were originally tailored to students who want to attend college in their home state, but many now allow all contributions to be used at out-of-state universities as well. Call your state treasurer’s office for information about your own state’s 529 offerings.
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