HARRISBURG, Pa., Jan. 29, 2013 (GLOBE NEWSWIRE) -- With the state income tax deduction for 529 college saving plan contributions now at $14,000 per person, per beneficiary, per year, Pennsylvania Treasurer Rob McCord called 2013 a great year to open and contribute to these tax-advantaged savings plans.
The new individual tax deduction of $14,000 represents a $1,000 increase from the 2012 level. Married couples filing jointly may deduct up to $28,000 in contributions provided each spouse has at least $14,000 in taxable income.
"Reducing your state income tax burden while saving for college is just one of the many reasons financial experts think 529 plans are one of the best ways for families to save for college," Treasurer McCord said. "Savings grow tax-free and, when used for qualified education expenses, earnings are exempt from state and federal taxes.
"January is a time of year filled with inspiration and the promise of new beginnings," Treasurer McCord said. "As a parent, I know firsthand how busy life can get, but being able to cross 'saving for college' off your list of goals for 2013 is an easy way to feel fulfilled and proud – a real accomplishment that benefits the whole family!"
The annual federal gift tax exclusion amount also increased to $14,000 per person, per beneficiary. A person may elect to accelerate their gifts by contributing five years of gifts in one year without federal gift tax implications – up to $70,000 ($14,000 x 5 years), and married couples filing jointly can double this amount to $140,000.
With nearly 177,000 open accounts, more families than ever before are saving for their loved ones' higher education with the Pennsylvania 529 College Savings Program. Last year, families invested over $378.7 million in the program, which exceeds contributions made in 2011 by about 11 percent.
The PA 529 College Savings Program provides two ways to save: the PA 529 Guaranteed Savings Plan (GSP) and the PA 529 Investment Plan (IP). The primary difference between the two plans is the way savings grow.
Growth in the PA 529 GSP is based on tuition inflation. For example, if you save enough for a semester at one of Pennsylvania's State System of Higher Education universities today, you will have enough for a semester there in the future – no matter when or how much tuition has gone up in the meantime. New accounts in the PA 529 GSP were up over 18 percent and contributions were up four percent in 2012 from 2011.
Returns in the PA 529 IP are based on financial market performance. The PA 529 IP features low fees and more than a dozen conservative and aggressive investment options from Vanguard, one of the nation's largest financial services companies. New accounts in the PA 529 IP were up over 26 percent and contributions were up over 18 percent in 2012 from 2011.
"Children deserve educational opportunities beyond high school, and higher education is highly correlated to a better quality of life and stronger economic security," Treasurer McCord continued. "A PA 529 college savings plan can help put that degree within reach and make a student's professional and personal dreams come true."
Visit www.PA529.com or call 1-800-440-4000 to contribute to or open a PA 529 account.
Media contact: Carrie Fischer Lepore, 717-772-2416 or email@example.com
The Pennsylvania 529 College Savings Program sponsors two plans – the PA 529 Guaranteed Savings Plan (GSP) and the PA 529 Investment Plan (IP). The guarantee of the PA 529 Guaranteed Savings Plan is an obligation of the GSP Fund, not the Commonwealth of Pennsylvania or any state agency. Before investing in either plan, please carefully read that plan's disclosure statement (available at www.PA529.com or by calling 1-800-440-4000) to learn more about that plan, including investment objectives, risks, fees, and tax implications.
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CONTACT: Media contact: Carrie Fischer Lepore, 717-772-2416 or firstname.lastname@example.org
Source: Pennsylvania Treasury