Tax benefits are one of the most attractive components of any 529 college savings plan because they can help the account grow faster.
Although all 529 plans share the same federal tax benefits, the state tax benefits vary widely. That’s because each plan is sponsored by an individual state, and each state has its own tax rules.
Unfortunately, many families simply select their own state’s plan without realizing that another state’s plan may offer better tax benefits.
Make sure clients know the facts before selecting a 529 plan because it may have an impact on their family’s finances for years to come.
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This material is provided for general and educational purposes only, and is not intended to provide legal, tax or investment advice, or for use to avoid penalties that may be imposed under U.S. federal tax laws. Clients should contact their attorney or other advisor regarding their specific legal, investment or tax situation.
Investments in 529 college savings plans are neither FDIC insured nor guaranteed and may lose some value. Some states offer favorable tax treatment to their residents only if they invest in the state’s own plan. Investors should consider before investing whether their or their designated beneficiary’s home state offers any state tax or other benefits that are only available for investments in such state’s qualified tuition program and should consult their tax advisor.
Before investing in the Plan, investors should carefully consider the investment objectives, risks, charges and expenses associated with municipal fund securities. The Program Disclosure Statement and Participation Agreement contain this and other information about the Plan, and maybe obtained by visiting our website at oppenheimerfunds.com or calling 1.800.CALL OPP (225.5677). Investors should read these documents carefully before investing.