Learn how tax benefits for 529 Plans are affected by the Pension Protection Act of 2006.
Higher education costs are steadily rising and a college savings strategy is becoming a requirement for today's parent. Many people saving money for college have found that the tax savings features of 529 college savings plans — made possible by the Pension Protection Act of 2006 — work to their advantage.
You may also be able to deduct some or all of your 529 plan contributions from your state taxes if you participate in a plan sponsored by your home state. To find out more, try a web search using the name of your state and ‘529’.
1When considering a beneficiary change, be sure to check your plan's Disclosure Booklet to see who qualifies as eligible family members.
Consider the investment objectives, risks, charges and expenses before investing in a 529 Plan. Please visit the website of the program you are considering for a Disclosure Booklet with this and more information. Read it carefully.
Before investing in a 529 plan, you should consider whether the state you or your designated beneficiary reside in or have taxable income in has a 529 plan that offers favorable state income tax or other benefits that are only available if you invest in that state's 529 plan. Non-qualified withdrawals may be subject to federal and state taxes and the additional federal 10% tax. Taxpayers should seek advice based on their own particular circumstances from an independent tax advisor.
The tax information herein is not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding tax penalties. It was written to support the promotion of TIAA-CREF Managed 529 plans. Taxpayers should seek advice based on their own particular circumstances from an independent tax advisor.
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