9-28-11 Expanded 529 Plans

Expanded 529 Plans

The 529 plans have become a popular way for parents and other family members to save for a child’s college education. Though contributions are not deductible on the federal return, they are deductible on the Oregon return, up to certain limits.

529 plan distributions are tax-free as long as they are used to pay qualified higher education expenses for a designated beneficiary. Qualified expenses include tuition, required fees, books, supplies, equipment and special needs services. In addition, for 2009 and 2010, the American Recovery and Reinvestment Act change made it possible for expenses to be included for technology and equipment, and internet access and related services to be used by the student while enrolled at an educational institution.

It is possible that the qualification of technology and equipment will be expanded into future years with future legislation. Given this, save those receipts for 2011 and stay tuned.

 
 
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