(Indianapolis) – You’ll be able to save more money for your kids’ college expenses next year.
Legislators have increased the state income tax credit from a maximum of $ 1,000 to $ 1,500 for the money you put into the College Choice 529 Savings Plan. This increase will take effect next year and will appear on your tax return next year.
Credit represents 5 for every $ 100 you receive. This means you’ll be able to maximize credit with your current $ 5,000 to $ 7,500 contribution.
Withdrawal from the 529 plan is tax-free, unless they pay college expenses. Higher Education Commissioner Teresa Lubbers says the Indiana version is one of the most comprehensive in the country: money can be used not only for teaching, but also for housing and textbooks. And it can be spent not only in state universities, but also in private universities and technical schools.
State Treasurer Kelly Mitchell predicts that the increased tax credit will encourage more people to take advantage of the program. Lubbers says people are more likely to go to college when the time comes, rather than fearing cost, if they start saving early.
This year marks the 25th anniversary of the Indiana 529 plan. The $ 1,000 tax credit went into effect in 2007, 10 years after the program began.
The 400,000 households have an average of $ 16,000 in the Indiana College Savings Account, for a total deposit of $ 7 billion.
College Choice Accounts Mark Silver Anniversary first appeared on 93.1FM WIBC with extended tax credits.