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Missouri Changes 529 Plan Deduction Allowance

December 02, 2008

Missouri has changed its allowable deduction for contributions to qualified savings programs to include ALL Section 529 Plans, not just Missouri’s Mo$t Plan. The deduction remains a maximum of $8,000 on a single return and $16,000 on a joint return.

A 529 plan is an education savings plan operated by a state or educational institution to help people set aside funds for future college costs. Although 529 contributions are not deductible on federal income tax returns, the investment grows tax deferred and distributions used to pay for the Missouri Changes 529 Plan Deduction Allowance beneficiary’s college cost are federally tax free. The Pension Protection Act of 2006 made the tax-free treatment permanent.

Money from a 529 plan can be used for tuition, fees, books, supplies, equipment, and certain room and board expenses required for any accredited college, university or vocational school in the United States and at some foreign universities.

And you can save for anyone using a 529 plan – children, grandchildren, friends – even yourself.

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