College plan tax break extended
College plan tax break extended
Good news for investors in 529 College Savings Plans – President Bush has signed into law a permanent exclusion of plan income from federal taxes.
The exclusion was slated to expire in 2010, making it uncertain whether parents, grandparents or others who put money into the plans for college would receive much of a tax benefit.
In addition to the tax exclusion, the President made permanent other 529-plan benefits established in 2001. They include rules allowing same-beneficiary rollovers, elimination of state-imposed penalties on non-qualified distributions, 529 status for private-college prepaid tuition plans (also called Independent 529 Plans), and including first cousins as eligible members of the family.
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