Alabama Gives $5,000 Tax Deduction for 529 Plan Contributions
Alabama Governor Bob Riley and State Treasurer Kay Ivey joined for a ceremonial signing of a new state bill that gives parents a tax break for contributing to a 529 college savings plan.
Already, Alabama residents who contribute to a 529 plan in its state don’t pay income taxes on the investment returns. But the new law also allows them to deduct up to $5,000 per year from their state income taxes for their contributions. That’s like getting $250 free from the state.
Read about Alabama 529 plans.