Senator Pat Browne urges Pennsylvanians to consider opening or contributing to a Pennsylvania 529 College Saving Program as a way to help pay college costs in the future.
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 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.
“Given the cost of education, it is never too early to start putting aside money to pay for it down the road,” Senator Browne said. “The PA 529 College Savings Program is a great way to plan ahead for those future costs as more and more students seek advanced degrees beyond high school.”
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. Additionally, 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).
Plus, 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to yearly taxes as they grow, and when used for qualified higher education expenses, earnings are tax-exempt when withdrawn.
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.
To open or contribute to an account, visit www.PA529.com or call 1-800-440-4000.