May is a month of celebrations, as youth across the country graduate from kindergarten thru college. CSPN and its members also celebrate in May – on the 29thfor National 5-29 Day by holding events across the country to raise awareness of the need to save for higher education. National 5-29 Day also helps families learn about 529 college savings plans and how they can help families achieve their dreams of higher education for their children and grandchildren.
In addition to outreach and education about 529 plans, CSPN works with Congress to strengthen the options and flexibility of 529 plans for participants. CSPN has a positive working relationship with Congress and has achieved numerous successes through this federal and state partnership. We continue to work to improve the plans for the benefit of all Americans. In this post, we share with you just one CSPN initiative pending in Congress – H.R. 529. Future posts will highlight other initiatives as CSPN continues to focus on expanding the reach of 529 plans to help families across the country.
CSPN worked with Rep. Lynn Jenkins (R-KS) and Rep. Ron Kind (D-WI) to introduce H.R. 529 in February. The legislation is designed to help moderate income families save for college in two ways:
1. Including 529 contributions in the SAVER’s tax credit – the current SAVER’s Credit applies only to retirement savings and provides a tax credit of up to $1,000 for an individual filer and $2,000 for those filing jointly. The 2012 eligibility for the credit was limited to those with incomes at or below $28,750 for an individual and $57,500 for joint filers.
2. Providing employers and employees with an incentive to contribute to their 529 plans by allowing employers to match employee 529 plan contributions up to $600 per year, with the employer match excluded from employees’ gross income.
You can help ensure H.R. 529 becomes law by contacting your member(s) of the House of Representatives and asking them to sign on to the bill as a cosponsor.
About the Authors:
Joan Marshall is the Executive Director of the College Savings Plans of Maryland, which offers both a 529 prepaid tuition program and a directly-sold 529 savings plan. Together, the plans have more than 207,000 beneficiaries with investments of more than $3.6 billion as of December 31, 2012. Marshall is currently the Past Chair of the College Savings Plans Network (CSPN) and is Co-Chair of the CSPN Federal Initiatives Committee.
Mary G. Morris is CEO of Virginia529, the independent state agency which sponsors Virginia’s four tax-advantaged 529 college savings programs, including a prepaid tuition program, two direct savings programs and one adviser savings program. As of December 31, 2012, Virginia529 has more than $39 billion in assets under management across its four programs in over 2.2 million active 529 accounts across the country. Morris serves as a member of the Executive Board of the College Savings Plans Network (CSPN) and Co-Chair of the CSPN Federal Initiatives Committee.