As the end of the year approaches, Pennsylvania State Treasurer Rob McCord wants to remind families that contributions made by December 31 to a Pennsylvania 529 College Savings Program account will help them save on taxes.
Taxpayers can deduct up to $13,000 per beneficiary in PA 529 contributions made by December 31 from their Pennsylvania taxable income on 2012 state tax returns.
Married couples filing jointly can deduct up to $26,000 per beneficiary if each spouse has taxable income of at least the amount deducted.
The Treasurer also highlighted the gift tax exclusion – a tremendous benefit for grandparents or family members who are able to contribute a larger amount to a loved one’s PA 529 account. Family and friends can contribute up to $65,000 in a single year ($130,000 for a married couple filing jointly) for each beneficiary without incurring federal gift tax consequences (assumes no other gifts in the next four years).
PA 529 savers receive even more valuable tax advantages, said Treasurer McCord. Earnings in a 529 plan are not subject to yearly taxes as they grow, and, when used for qualified expenses, such as tuition or room and board, earnings are tax-exempt when withdrawn.
To encourage more families to start saving for college in a tax-advantaged way, the McCord Treasury is offering free enrollment – a $50 savings – for all new PA 529 Guaranteed Savings Plan (GSP) accounts opened before December 31 at www.PA529.com. Use code MAXTAX when prompted. There is no enrollment fee for Pennsylvania’s other 529 plan, the PA 529 Investment Plan (IP).
The primary difference between the two plans is the way savings grow. Growth in the PA 529 GSP is based on tuition inflation. For example, if you save enough for a semester at one of Pennsylvania’s State System of Higher Education universities today, you will have enough for a semester there in the future – no matter when or how much tuition has gone up in the meantime. Returns in the PA 529 IP are based on financial market performance. The PA 529 IP features low fees and more than a dozen conservative and aggressive investment options from Vanguard, one of the nation’s largest financial services companies.
The Pennsylvania 529 College Savings Program is a tax-advantaged way to help make college more affordable and accessible for Pennsylvania families. Administered by the McCord Treasury, the program currently serves over 167,000 accounts with more than $2.5 billion in assets. Since the program’s inception in 1993, more than 20,500 students have saved for college with a PA 529 plan and benefitted from over $64 million in earnings.
A PA 529 plan can be used at a wide range of schools – from The Pennsylvania State University and University of Pittsburgh to trade and career schools like Empire Beauty Academy and McCann School of Business.
To learn more, or to contribute to or open a PA 529 account, visit www.PA529.com or call 1-800-440-4000.
Taxpayers can deduct up to $13,000 per beneficiary in PA 529 contributions made by December 31 from their Pennsylvania taxable income on 2012 state tax returns.
Married couples filing jointly can deduct up to $26,000 per beneficiary if each spouse has taxable income of at least the amount deducted.
The Treasurer also highlighted the gift tax exclusion – a tremendous benefit for grandparents or family members who are able to contribute a larger amount to a loved one’s PA 529 account. Family and friends can contribute up to $65,000 in a single year ($130,000 for a married couple filing jointly) for each beneficiary without incurring federal gift tax consequences (assumes no other gifts in the next four years).
PA 529 savers receive even more valuable tax advantages, said Treasurer McCord. Earnings in a 529 plan are not subject to yearly taxes as they grow, and, when used for qualified expenses, such as tuition or room and board, earnings are tax-exempt when withdrawn.
To encourage more families to start saving for college in a tax-advantaged way, the McCord Treasury is offering free enrollment – a $50 savings – for all new PA 529 Guaranteed Savings Plan (GSP) accounts opened before December 31 at www.PA529.com. Use code MAXTAX when prompted. There is no enrollment fee for Pennsylvania’s other 529 plan, the PA 529 Investment Plan (IP).
The primary difference between the two plans is the way savings grow. Growth in the PA 529 GSP is based on tuition inflation. For example, if you save enough for a semester at one of Pennsylvania’s State System of Higher Education universities today, you will have enough for a semester there in the future – no matter when or how much tuition has gone up in the meantime. Returns in the PA 529 IP are based on financial market performance. The PA 529 IP features low fees and more than a dozen conservative and aggressive investment options from Vanguard, one of the nation’s largest financial services companies.
The Pennsylvania 529 College Savings Program is a tax-advantaged way to help make college more affordable and accessible for Pennsylvania families. Administered by the McCord Treasury, the program currently serves over 167,000 accounts with more than $2.5 billion in assets. Since the program’s inception in 1993, more than 20,500 students have saved for college with a PA 529 plan and benefitted from over $64 million in earnings.
A PA 529 plan can be used at a wide range of schools – from The Pennsylvania State University and University of Pittsburgh to trade and career schools like Empire Beauty Academy and McCann School of Business.
To learn more, or to contribute to or open a PA 529 account, visit www.PA529.com or call 1-800-440-4000.