New Article: Reforming 529 College Savings Plans to Better Reach Low-Income Families
Posted by on October 20, 2006
[posted from AssetBuilding newsletter]
Reforming 529 College Savings Plans to Better Reach Low-Income Families
By Leslie Parrish, New America Foundation
with Margaret Clancy, Project Director, Center for Social Development
New America Foundation | March 2006
Qualified Tuition Plans, commonly called ?529 plans? after the applicable section of the federal tax code, were implemented in their present form in 2001. These state-sponsored plans can help families save for their children?s college education, or an adult can open an account to use for their own post-secondary expenses. Under current law, earnings and qualified withdrawals are exempt from federal income tax liability. Because these tax incentives are scheduled to expire after 2010, Congress intends to act to make these provisions permanent. This reauthorization of the federal incentives for 529 college savings plans presents an opportunity to improve upon these accounts and make them a better option for those low-income families who have the greatest need to save for and attend college.
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