Many people are already aware of the benefits of investing in a state-sponsored 529 college savings program. What might not be as well known yet are tax parity laws.
Numerous states give up-front state tax deductions or credits to residents who enroll in their own state-sponsored 529 plans. But until April, no state allowed residents to receive a tax break when investing in out-of-state college savings plans.
That changed when Maine, followed by Kansas, enacted a tax parity or state tax deduction law enabling families to invest in any in-state or out-of-state 529 college savings program and receive their own state’s tax deduction.
State-sponsored 529 plans are a popular way to invest for the cost of higher education, but typically families who try to compare plans state-by-state run into a great deal of confusion when navigating the different tax treatments.
Residents of Kansas will have an open door to other states’ 529 college savings programs starting with the 2007 tax year. Previously, they only received a tax advantage if they chose the state’s 529 Learning Quest plan, which is administered by Kansas State Treasurer Lynn...
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