Guest Editorial from State Treasurer Michael L. Fitzgerald
Do you have a plan for your advanced child tax credit payment? Starting July 15, these advanced payments could give families up to $300 per child, per month, until the end of the year. If you’re unsure where to start, I encourage you to consider investing the money into your child’s future with a College Savings Iowa 529 plan account. It’s a great opportunity to create or build upon the education savings by opening an account or adding to the contributions you’re currently making.
While you’re improving your child’s financial future, you can also improve yours with the tax benefits offered by the plan. In addition to tax-deferred earnings and tax-free qualified withdrawals for all participants, if a College Savings Iowa participant is an Iowa taxpayer, they can deduct up to $3,474 per beneficiary in determining their 2021 adjusted gross income.* It’s a win-win for you and your student!
College Savings Iowa allows anyone – parents, grandparents, friends and relatives – to invest for education expenses on behalf of a child. As a parent and grandparent, I can relate to a parent’s concern about what the future holds for their child. I may not have the answers, but I do know improving their financial future can give them a sense of support and encouragement to pursue their dreams. Whether those dreams lead them to a college, university, trade school or apprenticeship program, investing in College Savings Iowa can reduce their need to borrow money when the time comes.
Help the future student in your life pay for qualified education expenses, such as tuition, room and board, books, supplies, fees and more at any eligible educational institution in the United States or abroad.** With a minimum contribution of just $25 and professionally managed investment options, this affordable 529 plan is a great place to consider saving your advanced payment.
With a College Savings Iowa account, you can give your advanced child tax credit payments the opportunity to grow, while also improving the financial future of you and your child. To learn more about the plan and get started, visit our website at CollegeSavingsIowa.com or call (888) 672-9116.
About the author: Michael L. Fitzgerald is the State Treasurer of Iowa. He serves as the State’s banker, coordinates bonding and invests Iowa’s money. Under Treasurer Fitzgerald’s leadership, Iowa launched important programs including the Great Iowa Treasure Hunt unclaimed property program, College Savings Iowa 529 education savings plan and IAble, Iowa’s ABLE plan for individuals with disabilities. To learn more about the Treasurer, visit IowaTreasurer.gov. For more information on College Savings Iowa, visit CollegeSavingsIowa.com.
*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.