If you’re thinking about enrolling your newborn in the CollegeIllionois! pre-paid tuition 529 plan, you need to make a decision soon. You must enroll your child in the plan by August 1 in order to lock in 2007/2008 tuition prices.
You can expect tuition prices to be higher when open enrollment starts again in the fall.
To learn more about College Illinois, visit the Illinois 529 plan page.
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.
Washington D.C. is making contributing to a 529 college savings plan even a smarter idea. The D.C. city council has voted to increase the tax deduction limit to $4,000 per person. That means that people who contribute to a 529 plan can deduct up to $4,000 of their annual contribution from their Washington D.C. income taxes.
Of course, everyone still gets the federal income tax break. This break lets you withdraw money for qualified education expenses without paying taxes on the investment earnings.
We have updated our Washington D.C. 529 profile to reflect the new tax deduction.
The state of New York is making it easier to contribute to 529 savings plans. In the past, only the account holder of the 529 could contribute funds to a plan. (That’s typically a parent). Now other people, including relatives, employers, and friends, can contribute to the same 529 plan.
This is a great move. Only allowing parents to contribute was overly restrictive. But now New York has friendlier laws than a lot of states. I especially like how employers can contribute to a 529 college savings plan. Perhaps they could match their employees contributions like they do with 401(k)s?
Here’s more information about New York 529 plans.