Battle Creek Residents Could Benefit From New 529 Savings Plan
Potentially thousands of students and workers in the Battle Creek and Kalamazoo area could benefit from legislation introduced at the U.S. Capitol. Area 6th District Republican Congressman Fred Upton is joined by a Democrat from Virginia taking the bill before the US House. It would allow students and working residents to use their 529 savings plan dollars to cover a wider range of training and credentialing programs.
The 529 plans in Michigan are administered by the Michigan Education Savings Program. The state has set up some additional benefits using a 529 here, compared to the federal program. A Michigan 529 can be started for as little as a $25 dollar deposit, with additional deposits into the plan in increments of $25. There are attractive state tax benefits. Earnings qualify as federally tax-deferred. And there is no federal tax assessed when using 529 plan funds for approved expenses.
That’s where the Upton legislation comes into play. It would expand the range of educational, testing, and credentialing programs the 529 funds may be used to cover. Currently, the 529 savings funds are only allowed to be used at universities, vocational schools, colleges, and select post-secondary institutions.
The 18 term Congressman Upton says it's a big deal. “The bipartisan Freedom to Invest in Tomorrow’s Workforce Act aims to help students in southwest Michigan and across the country access opportunities to develop the necessary skills today to succeed in tomorrow’s workforce. As the country looks toward a robust economic recovery, we need skilled talent. This legislation will help make that happen.”
Companion legislation is also being introduced in the US Senate. It may take a couple of months for the legislation to be reviewed and voted upon in both houses of Congress.