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Section 529 PlanWhat is a Section 529 Plan? A qualified tuition program (also knows as a 529 plan or program) is a program set up to allow you to either prepay or contribute to an account established for paying a student's qualified education expenses at an eligible educational institution. The program must meet certain requirements. The interest earned from the qualified tuition program is generally not taxable if the withdrawn money is used for eligible tuition expenses. Many plans can be started with only $25 a month. Some states do offer a tax credit for money saved in a qualified tuition program. Who can set up a Section 529 Plan? Any person can set up a plan for a child pursing higher education. The donor may receive state income tax benefits. Where can I receive more information about a Section 529 Plan? More information about state tuition programs see Internal Revenue Service (IRS) Publication 970. The publication can be found at: www.irs.gov |
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