HARRISBURG, Pa., Dec. 13, 2016 /PRNewswire/ -- Pennsylvania Treasurer Timothy Reese today reminds Pennsylvanians there is still time to reduce 2016 state taxes by saving for higher education with the Pennsylvania 529 College Saving Program. Open or contribute to a PA 529 account by December 31 to receive the advantages of a state income tax deduction and federal gift tax exclusion.
"Before planning 2016 year-end celebrations, Pennsylvanians should take advantage of the tax savings a contribution to a PA 529 account will bring. PA 529 contributions can reduce a family's 2016 state taxes by hundreds of dollars per child and every dollar saved now could be one less needed to pay for higher education in the future," Treasurer Reese said.
Pennsylvania taxpayers can deduct PA 529 contributions from their Pennsylvania taxable income up to $14,000 per beneficiary, per year. Married couples filing jointly can deduct up to $28,000 per beneficiary if each spouse has taxable income of at least $14,000.
In addition to account owners, family and friends also have reason to celebrate as they, too, receive the same great tax benefits as an account owner. Friends, family and neighbors can contribute up to $70,000 in a single year ($140,000 for a married couple filing jointly) to each PA 529 account beneficiary without incurring federal gift tax consequences (assumes no other gifts in the next four years).
The year-end celebration of PA 529 benefits continues with still more valuable tax advantages. Earnings in a 529 plan are not subject to yearly taxes as they grow, and when used for qualified expenses such as tuition or room and board, earnings are tax-exempt when withdrawn.
As tuition costs continue to rise, Pennsylvanians are increasingly saving in the PA 529 program to help. At the end of the last fiscal year, a record 208,000 families were saving with the PA 529 program -- more than double the number from just five years ago. The value of these accounts was approaching $4 billion. "Last year, Pennsylvanians saved millions on their state income taxes because they invested in a 529 plan," said Treasurer Reese. "Simply visit www.PA529.com by December 31."
The PA Treasury 529 College Savings Program provides two ways to save: the PA 529 Guaranteed Savings Plan (GSP) and the PA 529 Investment Plan (IP). Both offer flexibility to pay for college expenses at most higher education institutions nationwide. The primary difference between them is the way savings grow.
The PA 529 GSP is a lower-risk plan where savings help keep pace with the rising costs of higher education without worrying about the volatileness of the stock market. Go to PA529.com and use enrollment code DEAL529 when prompted to save the $50 enrollment fee on the PA 529 GSP. It's PA Treasury's gift to you this holiday season!
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. There is no enrollment fee for the PA 529 IP. Returns on the IP are based on financial market performance.
Ring in the New Year by contributing to or opening a PA 529 account before December 31. Visit www.PA529.com or call (800) 440-4000 for more information.
Media contact: Debra S. Tingley, APR: (717) 787-2991or firstname.lastname@example.org
The Pennsylvania Treasury is an independent department of state government led by the state treasurer, who is elected every four years. The department's primary duty is to safeguard and manage the state's public funds. It invests state money to generate income on behalf of the citizens of Pennsylvania, reviews and processes payments for state government agencies, and serves as custodian of more than $100 billion in state funds. Key Treasury programs include Unclaimed Property, PA 529 College Savings Program and the Board of Finance and Revenue. 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 Guaranteed Savings Plan 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 (800)440-4000) to learn more about that plan including investment objectives, risks, fees and tax implications.
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SOURCE Pennsylvania Treasury