If you are you considering saving for a higher education for yourself or your child, Georgia offers you a clear path to your goals with its Path2College 529 plan. Georgia, like other states, has set up a plan that offers savings options for education advancement past high school.
According to the
U.S. SEC, the 529 tax-advantaged savings plans are authorized by the IRS to encourage people to save for future college costs. These plans, legally known as "qualified tuition plans," are sponsored by states, state agencies or educational institutions and differ from one state to the next on what they offer and entail.
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Georgia is offering incentives in 2015 that will benefit one child born with a $5,429,529 gift for college, and has already awarded first-born babies at certain hospitals with a Path2College contribution. The state even gives employers options to contribute to
529 plans at no cost to them, according to the Path2college529.com website. Here are some facts about Georgia's 529 plan.
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- Georgia offers some tax advantages with its Path2College plan that include the benefit of any contributions from earnings being federal and state tax-free and donations up to $2,000 annually can be eligible for a Georgia Income Tax deduction, for Georgia residents.
- Contributions to the Path2College 529 plan may reduce the taxable value of your estate. According to the state's web site, contributions to the plan may qualify for an annual federal gift tax exclusion of $14,000 per donor (and $28,000 per married couple) per beneficiary. Even better, is a five-year tax break of up to $140,000 for joint filers under certain circumstances.
- Anyone can open a Path2College account, including grandparents, relatives and friends who are U.S. citizens or resident aliens. The age requirement to open an account is 18 or older and Georgia state residency is not required to open an account.
- Money saved in the plan can be used for any advanced education facility in the country including 2 and 4-year colleges and universities, tuition, fees, books, supplies and required equipment, along with room and board and expenses for special-needs students.
- There are seven investment options to choose from: managed allocations, aggressive managed allocations, 100 percent equity, balanced fund, 100 percent fixed-income, money market and guaranteed.
- Minimum contributions to the Path2College 529 plan begin with an initial $25 investment, and then $15 per contribution per beneficiary when made through payroll deduction, and there are no income limitations.
- The maximum account contribution level for a single beneficiary is $235,000. Once maximum amounts are met, the account can continue to accrue earnings. If the beneficiary fails to attend a qualified school, the account can be transferred to another beneficiary.
- There are no sales charges, start-up or maintenance fees associated with a Path2College account. Account holders can access their accounts online.
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