Guest Editorial from State Treasurer Michael L. Fitzgerald
Near the end of each calendar year, I often see parents and grandparents searching for gifts to give the children in their lives. This holiday season, look no further than College Savings Iowa and giving the gift of education. Families around the state are celebrating many things, from finishing the fall semester to holidays and a new year. During the festivities, invite the special people in your life to give one of the most meaningful gifts a child may ever receive – a financial contribution to their education. With College Savings Iowa, you can help give your loved ones a brighter future.
There are many ways to give the gift of education to your loved ones. You can start a new College Savings Iowa account, contribute to your existing accounts, or contribute to someone else’s account using Ugift. With Ugift, friends and family can contribute to your College Savings Iowa accounts simply by visiting ugift529.com and using the unique code found by logging into your College Savings Iowa account. With several people making holiday contributions, your child’s account could get a nice year-end boost.
In addition, Iowa taxpayers who are account owners can receive a gift of their own when contributing to their College Savings Iowa accounts. In 2020, Iowa taxpayers who are participants can deduct up to $3,439 of their contributions, per beneficiary account they own and contribute to, in determining their adjusted gross income for Iowa income tax purposes.* For example, married participants who contribute to separate accounts on behalf of their two children can deduct up to $13,756 (4 x $3,439) on their 2020 Iowa taxes.
College Savings Iowa is for more than just the traditional college path. Investors can withdraw their investment federally tax-free to pay for qualified higher education expenses, which includes tuition, books, supplies and certain room and board costs at any eligible college, university, community college, technical training school or apprenticeship program in the United States or abroad.**
Education is a gift that lasts. No matter the age, or what their future dreams are, investing in a child’s future can lead to a brighter future for them and our communities.
About the author: As State Treasurer of Iowa, Michael L. Fitzgerald acts as the state’s banker, invests Iowa’s pooled money, coordinates bonding, and returns millions of unclaimed property through the Great Iowa Treasure Hunt. He also helps families save for higher education through Iowa’s 529 College Savings Programs, including College Savings Iowa, helps people with disabilities and their families save for disability-related expenses through IAble and promotes financial education and empowerment throughout the state.
*Adjusted annually for inflation. If withdrawals are not qualified, the deductions must be added back to Iowa taxable income.
**Earnings on nonqualified withdrawals may be subject to federal income tax and a 10% federal penalty tax, as well as state and local income taxes. The availability of tax or other benefits may be contingent on meeting other requirements.