Section 529 Plans
Section 529 Plans, also referred to as Qualified Tuition Programs (QTP), fall under one of two types, prepaid tuition plans and college savings plans. Section 529 Plans generally refer to state or educational institution sponsored education savings plans intended to assist families with a means of setting aside funds for their children’s college expenses. Some of the main benefits of Section 529 Plans are that:
· lock in current tuition at current rates
· contributions and disbursements for qualified expenses are tax exempt
· plans remain under the control of the plan owner, usually the parents
· plan earnings accumulate on a tax-deferred basis
· funds can be transferred to other family members
· there are no income limitations or age restrictions.
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