• 529 Plans: Tax Breaks for College Savings
  • July 29, 2003 | Author: Claudia G. Allen
  • Law Firm: Strauss & Troy A Legal Professional Association - Cincinnati Office
  • Tax law changes effective in 2002 encourage personal saving in a variety of ways. None is more significant than the change to Internal Revenue Code Section 529, the law permitting states to offer prepaid tuition and tax-advantaged savings programs designed to help finance college expenses. Beginning in 2002, savings held in "529 Plans" not only grow tax-free as long as they remain in the Plan; they also remain untaxed when they are distributed to pay for the educational expenses for the chosen beneficiary.