NC 529 Plan at 'Head of the Class,' Says Money Magazine

RALEIGH, N.C., Sept. 23 /PRNewswire-USNewswire/ -- North Carolina's 529 Plan is one of three state college-savings plans at the "Head of the Class," according to the October 2010 issue of Money Magazine.

Highlighting the North Carolina, Delaware and Utah plans, Money Magazine said, "These 529s, all with ultralow fees and age-based portfolio options, are top picks for college savers shopping nationally. Even though many states offer resident tax perks, those breaks can't always make up for high fees."

North Carolina taxpayers with accounts in the NC 529 Plan can benefit from both low fees and an available tax break.  In fact, whether the NC taxpayer is an NC 529 account owner or contributing to someone else's NC 529 account,  his or her contributions to an NC 529 account of up to $2,500 for individuals ($5,000 for joint filers) per year are currently eligible for a state tax deduction.  For example, according to certified financial planner Holly K. Nicholson, a married couple filing jointly with income of $75,000 and contributing $5,000 (including roll-overs from another 529 plan) to the NC 529 Plan may save as much as $350 in N.C. state income tax.

529 account earnings are also free from federal and state taxes as long as college savings are used for qualified higher education expenses such as tuition, room and board, books, fees and required equipment.  Money in an NC 529 account can be used at almost any four-year or two-year college, in-state or out-of-state.

Investment choices in the NC 529 Plan include age-based or individual options from Vanguard, NCM Capital Management Group, State Employees' Credit Union (SECU) and the State Treasurer of North Carolina.  The Federally-Insured Deposit Account from SECU is the newest option, added in April 2010.  

During the past year, the number of NC 529 accounts has increased by 16.3%, according to College Foundation, Inc., the Program Administrator.  In August 2010, there were 81,071 account owners with close to $600 million invested, a fund value increase of 28.7% over last August.

Go to CFNC.org/NC529 to learn more about North Carolina's 529 college savings plan, to enroll or to make a contribution.  If you have any questions about the NC 529 Plan, call toll-free 1-800-600-3453.

SOURCE College Foundation, Inc.