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Utilize tax advantages and prepare for future education costs with contributions to a 529 College Savings Plan
ATLANTA – For Georgia families, saving for college in the state’s Path2College 529 Plan not only provides a financial foundation to help offset the cost of continued education, it also provides tax advantages. Contributions to the state of Georgia’s Path2College 529 Plan made by the tax deduction deadline, this year – Monday, April 15 – are eligible for deduction on the preceding year's tax return.
By contributing as little as $25, families can open a Path2College 529 Plan. Contributions are deductible for Georgia income tax purposes up to $4,000 per year, per beneficiary, for those filing a joint return and up to $2,000 per year, per beneficiary, for those filing a single return. Any earnings on those contributions in the Path2College 529 Plan are federal and Georgia income tax-deferred.
Additionally, when it’s time to use your savings, withdrawals for qualified higher education expenses (which may include tuition, fees, books, certain room and board costs, supplies and equipment required for enrollment, such as computers and related technology such as internet access fees, software or printers) are federal and Georgia income tax-free.
“We work year-round to inform families about the benefits of early financial planning for their children’s education, but families are often more focused on financial planning during tax time, so it’s a great time to consider a college savings plan,” said Caylee Noggle, Interim President of the Georgia Student Finance Commission, which partners with the Office of the State Treasurer to administer the Path2College 529 Plan for the state of Georgia. “Whether you have a newborn or a high school student, it’s never too early or too late to start saving.”
College savings are the highest since 2013, up more than 10 percent from 2016, and the average amount saved in 529s has nearly doubled since 2016 nationwide.
In Georgia, the numbers are also increasing. As of December 31, more than 200,000 accounts have been opened and more than $2.8 billion has been saved in the Path2College 529 Plan. Additionally, more than 48 thousand beneficiaries have withdrawn more than $880 million to pay for higher education-related expenses.
“We want to encourage families to save today, and to not get discouraged if they can’t save the full amount or even a large amount. Every little bit helps and saving regularly over time is the best way to build a strong financial foundation,” said Noggle.
Parents, grandparents, relatives and friends who are U.S. citizens or resident aliens and at least 18 years of age may open an account and/or contribute to a Path2College 529 Plan on behalf of a beneficiary.
Savings in the Path2College 529 Plan can be used at virtually any school in the United States and some abroad. Eligible institutions include any school that participates in the federal financial aid program, which encompasses all public institutions and most private colleges. Savings can be used to obtain two-year vocational/technical education, a traditional four-year degree and for graduate work.
For more information about the Path2College 529 Plan or to open a college savings account, please visit www.Path2College529.com or call (877) 424-4377.
To learn more about the Path2College 529 Plan, its investment objectives, tax benefits, risks, and costs please see the Disclosure Booklet at path2college529.com. Read it carefully. Investments in the Plan are neither insured nor guaranteed and there is the risk of investment loss. Check with your home state to learn if it offers tax or other benefits such as financial aid, scholarship funds or protection from creditors only available for investing in its own 529 plan. Consult your legal or tax professional for tax advice, including the impact of the new federal tax changes. If the funds aren't used for qualified higher education expenses, a 10% penalty tax on earnings (as well as federal and state income taxes) may apply.
TIAA-CREF Individual & Institutional Services, LLC, Member FINRA and SIPC, distributor and underwriter for the Path2College 529 Plan.