Now is the time to make a 529 plan contribution before year-end for your child or grandchild!
- Earnings on assets in a 529 plan are tax-deferred and if the distributions are qualified withdrawals for higher education expenses, they are federally tax free plus tax free in your home state in most cases. Qualified distributions: tuition, room & board, and other related expenses.
- 529 benefits can now be used to pay for tuition of up to $10,000/yr at elementary and secondary public, private or parochial schools. Tax deduction is possible in over 30 states, including VA, MD and D.C.
- Plan contributions are gifts from the taxpayer to the 529 beneficiary. The annual gift limit is $15,000/beneficiary ($30,000 if married). You are able to contribute an amount equal to five years of gifts in just one year (up to $75,000, $150,000 for a married couple) with zero gift tax liability.