Georgia’s 529 College Savings Plan has a new name - it’s now the Path2College 529 Plan.  Included in the plan are two new investment options, lower fees and an improved Georgia state income tax deduction.

Contributions to the plan are made on an after-tax basis for federal income tax purposes.  However, beginning with the tax year 2007, contributions to the plan are deductible up to $2,000 for Georgia income tax purposes.  There are no income restrictions on this deduction, however the deduction is not available for transfers from other states’ 529 plans.

Contributions to the Path2College 529 Plan may reduce the taxable value of your estate. Contributions to the Path2College 529 Plan, together with all other gifts from the account owner to the beneficiary, may qualify for an annual federal gift tax exclusion of $12,000 per donor, per beneficiary for 2008. If an account owner’s contribution to a Path2College 529 Plan account for a beneficiary in a single year exceeds $12,000, the account owner may elect to treat up to $60,000 of the contributions, or $120,000 for joint filers, as having been made over a period of up to five years for federal gift tax exclusion.
Both withdrawals and earnings from the plan are free from federal and state income taxes when used to pay qualified educational expenses.

You can open an account online or contact Path2College 529 Plan representatives at 1-877-424-4377.  As always, if you have questions, do not hesitate to contact us at info@muddlee.com.