College fees can be a challenge for anyone. With tuition fees rising, as well as other related costs, including books, lab fees, room and board, students and families across the country are looking for ways to reduce this financial burden without having to apply for student loans and online payday loans Illinois.
While grants and scholarships are always a great option, many families are starting to save money to educate their children under the 529 plan. Each state has a plan that benefits families who are saving money to educate their children.
While this previously only applied to colleges, the 2017 Tax Act allows contributions to be used to cover primary and secondary school costs.
Parents aren’t the only ones who can use Plan 529. Grandparents, aunts, uncles, and others can contribute to Plan 529 to help cover education costs. There are two different types of plans to consider: the 529 college savings plan, which allows you to invest and withdraw tax-free to cover education costs, and prepaid plans, which allow you to lock in current state public school tuition rates.
Many states offer state income tax benefits when an individual contributes to a government-sponsored plan. Some states even provide tax breaks for out-of-state plans.
States that offer tax credits to intra-state savings plan depositors
- Alabama – CollegeCounts 529 Plan
- Arkansas – GIFT College Investment Plan
- Colorado – CollegeInvest College Direct Savings Plan
- Connecticut – Connecticut Foundation for Higher Education
- District of Columbia – DC 529 College Savings Program
- Georgia – Path2College 529 Plan
- Idaho – Idaho College Savings Program
- Illinois – Bright Start College Savings Program
- Indiana – CollegeChoice 529 Direct Savings Plan
- Iowa – Iowa State Savings College Plan 529
- Louisiana – START Savings Program
- Maryland – Maryland529
- Massachusetts – Massachusetts U. Fund College Investment Plan
- Michigan – Michigan Educational Savings Program
- Minnesota – Minnesota College Savings Plan
- Mississippi – Mississippi College Affordable Savings Program
- Nebraska – Nebraska Education Savings Fund – College Direct Savings Plan
- New Mexico – Education Plan
- New York – New York 529 College Savings Program
- North Dakota – College SAVE
- Ohio – Ohio CollegeAdvantage 529 Savings Plan
- Oklahoma – Oklahoma College Savings Plan
- Oregon – Oregon State College Savings Plan
- Rhode Island – CollegeBound Foundation
- South Carolina – Savings Plan for Future Scientists 529
- Utah – Utah Education Savings Program
- Vermont – Vermont Higher Education Investment Plan
- Virginia – Virginia529 inVEST
- West Virginia – SMART529 WV Direct College Savings Plan
- Wisconsin – Edwest College Savings Plan
States that offer benefits to any government plan
- Arizona – Arizona Family College Savings Program
- Kansas – Learning Quest 529 Education Savings Program
- Missouri – MOST 529 College Savings Program
- Montana – Montana Family Education Savings Program
- Pennsylvania – PA 529
- States that do not provide tax breaks for 529 plans include:
- Alaska – Savings Plan for University of Alaska Colleges
- California – ScholarShare College Savings Plan
- Delaware – College Delaware Investment Plan
- Florida – Florida 529 Savings Plan
- Hawaii – Hawaii College Savings Program
- Kentucky – Kentucky Education Savings Plan Trust
- Maine – NextGen College Investment Plan
- Nevada – Nevada College Savings Plan
- New Hampshire – UNIQUE College Investment Plan
- New Jersey – BEST New Jersey State College Savings Plan
- North Carolina – Carolina North Carolina Foundation
- South Dakota – College Access 529
- Tennessee – TN Stars 529 College Savings Program
- Texas – Texas College Savings Plan
- Washington DC – DreamAhead College Investment Plan
The minimum contribution varies by state, with the highest minimum contribution being $250.
States that require no minimum contributions
- Alabama
- Florida
- Illinois
- Missouri
- Nebraska
- New York
- Rhode Island
- South Carolina
- Utah
- West Virginia
Of all 50 states, Wyoming is the only one without a state plan.