Saving for College the Smart way - 529 Plans          

 

Arkansas 529 Plan

Arkansas offers one 529 college savings plan, a traditional 529 savings plan called The Gift College Investing Plan.

Arkansas GIFT College Investing Plan

The GIFT College Investing Plan is a traditional 529 plan that allows you to invest money today and reap tax benefits when you withdraw it to pay for qualified education expenses.

Type: Direct - this Arkansas 529 plan can be purchased directly from the state.

Fund Family: The Vanguard Group

Minimums: To get started you can deposit $25 or set up a monthly payment plan of only $10.  The minimum subsequent contribution to Arkansas's 529 plan is $10 unless you choose to automatically deduct from your paycheck. With this option, you can contribute as little as $5.

Maximum Contributions:  Currently, you can contribute until the balance reaches $366,000 in your Arkansas 529 plan.  Of course, your total amount in the plan can be higher as your investments group.  529 plans typically increase the contribution limit over time, so you may be able to contribute more.

Tax Benefits:  Good news for Arkansas residents -- by investing in your state's 529 plan, you can deduct up to $5,000 on your state income taxes for single filer and $10,000 for married filers.  You also get federal income tax benefits as you do not pay income tax on your earnings.  Out-of-state participants still get the federal tax benefits.

Other Benefits: The Arkansas 529 Plan Review Committee sets aside money for matching grants of up to $500 for eligible students based on household income levels.

Residency: The Gift College Investing Plan is open to all United States residents, not just those in Arkansas.

You can learn more about the this 529 plan at the official web site.


 


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