X
X

Find Your Specialist

X

Contact Us

Go Back

Georgia Doubles Deduction for §529 Education Savings Plans

The Path2College 529 Plan, sponsored by the State of Georgia, is a tax-advantaged way for parents and other family members to save for college, offering both federal and state tax benefits. Contributions are not deductible on your federal tax return, but accumulated earnings are excluded from federal tax and may be withdrawn tax-free as long as the funds are used for qualified education expenses. Earnings are not taxed at the state level, either, and Georgia offers a generous deduction for contributions.

In fact, the Georgia state tax benefits for 529 plans just got better. The state tax deduction has been increased from $2,000 to $4,000 per year per beneficiary, for single taxpayers, and from $4,000 to $8,000 per year per beneficiary, for married couples filing jointly. Note that this increase takes effect in 2020 under Georgia HB 266, signed into law in May 2019.

Deadlines for Deductions

Deductible contributions may be made for a taxable year up until the federal deadline for IRA contributions. For example, you could make the deposit on April 14, 2021 and have the deduction apply to your 2020 return.

Rules on Withdrawals, Fund Limits

Tax-free withdrawals may be used for tuition, fees, certain room and board costs, books and supplies, as well as computers and related technology costs such as Internet access fees and printers. Up to $10,000 annually can be used toward K-12 school tuition per student from your 529 plan. Withdrawals used for other purposes may be subject to tax on the earnings, as well as a 10% penalty, so it is important to talk to your tax advisor before you decide to do anything else with the funds.

The maximum account balance per beneficiary for the Path2College 529 Plan is $235,000. Contributions beyond this amount are not permitted, but the fund can continue to accrue tax-free earnings. Also, there is no federal gift tax on contributions up to $15,000 per year for single filers and $30,000 for married filers.

Importantly, there are no income restrictions on either you, as the contributor, or on the beneficiaries of 529 plans. This flexibility means that these accounts should be considered as a key tax planning option for college funding for taxpayers at all income levels. Talk to your Frazier & Deeter tax advisor about how best to start your college savings plan.

Related Articles

Privacy Overview

When you use or access the Site, we use cookies, device identifiers, and similar technologies such as pixels, web beacons, and local storage to collect information about how you use the Site. We process the information collected through such technologies, which may include Personal Information, to help operate certain features of the Site (e.g., to prevent online poll participants from voting more than once), to enhance your experience through personalization, and to help us better understand the features of the Site that you and other users are most interested in.

You can enable or disable our use of cookies per category.

When you use or access the Site, we use cookies, device identifiers, and similar technologies such as pixels, web beacons, and local storage to collect information about how you use the Site. We process the information collected through such technologies, which may include Personal Information, to help operate certain features of the Site (e.g., to prevent online poll participants from voting more than once), to enhance your experience through personalization, and to help us better understand the features of the Site that you and other users are most interested in.

You can enable or disable our use of cookies per category.

Necessary Always Enabled

Essential cookies enable you to navigate our Site and use certain features, such as accessing secure areas of our Site and using other features of our service that require us to keep track of certain information as you navigate from page to page. Although some of these cookies are “required” to enable certain functionality, you can disable them in the browser, but doing so will limit your ability to use the features supported by such cookies.

Functionality cookies are cookies that support features of the Site, such as remembering your preferences.

These cookies collect information about how you use our Site, including which pages you go to most often and if they receive error messages from certain pages. These cookies are only used to improve how our Site functions and performs.

From time-to-time, we may engage third parties that track individuals who visit our Site. These third parties may track your use of the Site for purposes of providing us with certain marketing automation features (to help us improve our outreach to current and prospective clients) and providing you with targeted advertisements.