College savings now tax deductible
December 30, 2001
By JOSH NICHOLS
Daily Press writer
For the first time this year, Colorado families can deduct their contributions to a college savings account when calculating their Colorado state income taxes.
They can do so using CollegeInvest, the only Colorado tax-deductible 529 college savings plan.
But representatives of CollegeInvest warn that Dec. 31 is the deadline to open or add to an account in order to deduct contributions when calculating 2001 Colorado state income taxes.
“As long as they date an application by Dec. 31, they’ll be able to take advantage of the deduction this year,” said Geri Reinardy, chief college and governmental affairs officer for CollegeInvest.
CollegeInvest has been in existence for five years, but this is the first year contributions can be deducted from one’s taxes.
“We have more than 17,000 accounts that have been opened in the past five years adding up to over $125,000,000 invested,” Reinardy said.
Because of the new tax deductible feature and nearing deadline, recent weeks have been particularly hectic.
“Over the past few weeks, we’ve received more than 1,700 phone calls and emails requesting information, and enrollment applications are arriving daily by mail and walk-in visits to our offices,” she said.
People need $25 to open an account, and the check simply needs to be dated Dec. 31 to receive the tax deduction.
Benefits of the plan include:
Parents, grandparents, aunts, uncles and friends can open or add to an account and deduct their contribution from their Colorado taxable income.
All earnings on accounts through CollegeInvest are Colorado and federally tax-free when used for higher education expenses.
Money saved through CollegeInvest can be used nationwide at public and private colleges and universities to pay for tuition, fees, room and board, books and required supplies.