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Boscola: Save for College while Saving on Taxes this Month
On December 21, 2012 ·
Bethlehem, December 21, 2012 – State Sen. Lisa M. Boscola today said families can open or add to a Pennsylvania 529 College Saving Program this month, while reducing their state income tax.
“If you contribute to your college savings plan by December 31, you can also help reduce your 2012 state income taxes,” Boscola said. “It’s a good way to save money for college, while also reaping a valuable tax benefit.”
Boscola said families can visit www.PA529.com to learn more.
She said she and her staff also stand ready to help families obtain information and apply. Her local offices are located at Main Street Commons, 559 Main Street, Suite4 270, Bethlehem (610-868-8667); West Chatasauqua Office Building, 2123 1st Ave., Suite A-4, Whitehall (610-266-2117); and the Dominick A. Lockwood Business Center, 600 Main Street, Suite 112, Stroudsburg (570-420-2938).
Additional information and links to numerous government programs and services are available at www.senatorboscola.com
Under the program, taxpayers can deduct up to $13,000 per beneficiary in PA 529 contributions from Pennsylvania taxable income on their state tax returns for 2012. Married couples filing jointly can deduct up to $26,000 per beneficiary if each spouse has taxable income of at least the amount deducted. In addition, family and friends can contribute up to $65,000 in a single year ($130,000 for a married couple filing jointly) for each beneficiary without incurring federal gift tax consequences (assumes no other gifts in the next four years).
Boscola added that earnings in a 529 plan are not subject to yearly taxes as they grow, and when used for qualified higher education expenses, earnings are tax-exempt when withdrawn. To encourage more families to save for college in a tax-advantaged way, the PA 529 College Savings Program is offering free enrollment – a $50 savings – for all new PA 529 Guaranteed Savings Plan (GSP) accounts opened by December 31 at www.PA529.com. Use code TAXSMART when prompted.
The PA 529 GSP is designed to help savings grow to meet the future cost of education. When used for qualified higher education expenses, PA 529 GSP contributions grow at the rate of tuition inflation (subject to fees and premiums). For example, if you save enough for a semester at one of the 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.
Pennsylvania also offers a second option, the PA 529 Investment Plan (IP), in which returns are based on financial market performance. The PA 529 IP features low fees and more than a dozen conservative and aggressive investment options from The Vanguard Group, one of the nation’s largest financial services companies. There is no enrollment fee for the PA 529 IP.
# # #
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