States Boost 529 Plan Incentives

Many states provide a tax break for residents, and now they're offering matching contributions and other perks.

(Image credit: designer491)

States have long offered tax breaks to parents who contribute to 529 college-savings plans. Now, they’re increasingly offering an even more straightforward incentive: cash. Fifteen states offer matching contributions, seed money, or other forms of financing to encourage residents to sign up.

Money stashed in a 529 account grows tax-free, and withdrawals are tax-free as long as the funds are used for qualified educational expenses. While you can invest in any state’s plan, many states provide a tax break for residents.

Subscribe to Kiplinger’s Personal Finance

Be a smarter, better informed investor.

Save up to 74%
https://cdn.mos.cms.futurecdn.net/hwgJ7osrMtUWhk5koeVme7-200-80.png

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Sign up

To continue reading this article
please register for free

This is different from signing in to your print subscription


Why am I seeing this? Find out more here

Sandra Block
Senior Editor, Kiplinger's Personal Finance

Block joined Kiplinger in June 2012 from USA Today, where she was a reporter and personal finance columnist for more than 15 years. Prior to that, she worked for the Akron Beacon-Journal and Dow Jones Newswires. In 1993, she was a Knight-Bagehot fellow in economics and business journalism at the Columbia University Graduate School of Journalism. She has a BA in communications from Bethany College in Bethany, W.Va.