What is a 529 plan?
529 refers to Section 529 of the Internal Revenue Code. 529 plans are tax-advantaged programs that help families save for college. Residents of any state can invest in any 529 Plan, you do not have to be a resident of a particular state to invest in that state’s plan. There are three types of 529 plans: Independent 529 Plan. A prepaid tuition program designed to provide you with an opportunity to prepay undergraduate tuition for a beneficiary at participating private colleges and universities throughout the United States. By participating in Independent 529 Plan, you can pay for your beneficiary’s tuition and certain fees today and lock in current tuition rates and a discount for your beneficiary’s future enrollment at a Participating Institution. Independent 529 Plan offers the same federal tax advantages as the 529 savings plans originally specified by the Internal Revenue Code. State-sponsored college savings plans. The value of these plans fluctuates with the markets. They can be u
The 529 Plan was created under section 529 of the Internal Revenue Code (IRC) and sponsored by individual states, 529 plans are tax-advantaged education savings vehicles. Beginning in 2002, changes to the Internal Revenue Code have rendered these plans superior to many other savings vehicles in tax treatment of withdrawals used for qualified education expenses. However, under a “sunset provision”, the tax exemption for earnings on qualified withdrawals is scheduled to expire on December 31, 2010 unless extended by Congress.
A 529 plan is a tax-advantaged savings plan designed to encourage saving for future college costs. 529 plans, legally known as qualified tuition plans, are sponsored by states, state agencies, or educational institutions and are authorized by Section 529 of the Internal Revenue Code. There are two types of 529 plans: pre-paid tuition plans and college savings plans. All fifty states and the District of Columbia sponsor at least one type of 529 plan. In addition, a group of private colleges and universities sponsor a pre-paid tuition plan. What are the differences between pre-paid tuition plans and college savings plans? Pre-paid tuition plans generally allow college savers to purchase units or credits at participating colleges and universities for future tuition and, in some cases, room and board. Most prepaid tuition plans are sponsored by state governments and have residency requirements. Many state governments guarantee investments in pre-paid tuition plans that they sponsor. Colleg
A 529 plan is an educational savings plan operated by a state or educational institution designed to help families set aside funds for future college costs. As long as the plan satisfies a few basic requirements, the federal tax law provides special tax benefits to you, the plan participant (Section 529 of the internal revenue code). 529 plans are usually categorized as prepaid or savings, although some have elements of both. Every state now has at least one 529 plan available. It’s up to each state to decide if they will offer a 529 plan (or possibly more than one), and what it will look like. Educational institutions can offer a 529 prepaid plan but not a 529 savings plan (the private-college Independent 529 plan is the only institution-sponsored 529 plan thus far).
