As in years past, 529 providers have been busy with back-to-school ads, but this year, many of them are emphasizing why 529s are a better alternative to putting assets in a child’s name due to so-called “kiddie taxes” on capital gains, Reuters reports.

Under the new tax, which takes effect in January, the first $850 of a child’s earnings is tax-free and the next $850 is taxed at the child’s rate, which is usually 5% to 10%. Anything about $1,700 is taxed at the parent’s rate.

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