ATLANTA, Ga. - A big change in 2018 for college savings plans. They're not just for college anymore. Your Georgia 529 Plan can now be used to pay for private school. And we're not talking about private college but rather private K-12 tuition for elementary, junior and high schools.
First, let's get up to speed on what a 529 plan is. In Georgia it's called the Path2College 529 Plan. It's a college savings plan. Each parent can contribute up to $15,000 a year, per child. And anybody who wants to do that for your child can. These plans are not taxed federally providing you use them for education, but there is a Georgia tax break, too.
Path2College 529 Plan
- Single: up to $15,000
- Federal: tax-free
- State: tax deductible
We sat down with money manager Lisa Brown at Brightworth who said that while the big news this year is that you can use your 529 plan cash to pay for private school, many families don't know about the state tax break that's available, too, as it's pretty new.
"Married couples can put in up to $4,000 in Georgia's plan, per child, and take a Georgia state income tax deduction on the first $,4000 you put in. So, that saves a family $240 in Georgia income taxes."