Holiday Shopping Alert: Turn Holiday Spending Into College Savings With the Pennsylvania 529 College Savings Program
December 13, 2013 - Harrisburg, PA
HARRISBURG, PA--(Marketwired - December 13, 2013) - State Treasurer Rob McCord today encouraged Pennsylvanians to give the gift of education by opening or contributing to a Pennsylvania 529 College Savings Program account.
According to Treasurer McCord, family members and friends may contribute to a child's PA 529 account and also receive a Pennsylvania income tax deduction. The state income tax deduction for 529 college savings plan contributions was increased to $14,000 per taxpayer, per beneficiary, in 2013.
"Today's shoppers work hard to find the best possible deal," Treasurer McCord said. "With the PA 529 College Savings Program, you can give a truly meaningful gift and reward yourself in the process. It doesn't get much better than that!"
The annual federal gift tax exclusion amount also increased to $14,000 per person, per beneficiary. A person may elect to accelerate their gifts by contributing five years of gifts in one year without federal gift tax implications -- up to $70,000 ($14,000 x 5 years) -- and married couples filing jointly can double this amount to $140,000.
The PA 529 College Savings Program provides two ways to save: the PA 529 Guaranteed Savings Plan (GSP) and the PA 529 Investment Plan (IP). Both plans provide flexibility to pay for college expenses at most higher education institutions across the country. The primary difference between the two plans is the way savings grow.
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 based on tuition inflation (subject to fees and premiums). For example, if you save enough for one semester today at a State System of Higher Education university, you will have enough for one semester there in the future, no matter when or how much tuition has increased in the meantime.
The second plan, 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.
Treasurer McCord recently lowered fees by up to 30 percent for the PA 529 GSP and 22 percent for the PA 529 IP, which represents a 44 percent reduction in fees since Treasurer McCord took office in 2009.
"Lower fees equal more money saved, and that means more funds available for Pennsylvania families to invest in their children's future," Treasurer McCord said.
"We work hard to make the Pennsylvania 529 College Savings Program one of the best programs of its kind in the country, and I am happy to report that we are helping more families than ever before make college more affordable and accessible for their children."
To learn more, or to contribute to or open a PA 529 account, visit www.PA529.com or call 1-800-440-4000.
The Pennsylvania 529 College Savings Program sponsors two plans -- the PA 529 Guaranteed Savings Plan (GSP) and the PA 529 Investment Plan (IP). The guarantee of the PA 529 GSP is an obligation of the GSP Fund, not the Commonwealth of Pennsylvania or any state agency. Before investing in either plan, please carefully read that plan's disclosure statement (available at www.PA529.com or by calling 1-800-440-4000) to learn more about that plan, including investment objectives, risks, fees, and tax implications.
Carrie Fischer Lepore