Congress will most likely make the Federal tax benefits permanent for 529 college savings plans, Dow Jones Newswires reports.
Many believe that if Congress does, in fact, make the tax benefits permanent, more people would be encouraged to save for college via 529s and confusion about the plans would be greatly reduced.
"I think we have incredible support," said Diana F. Cantor, executive director of the Virginia College Savings Plan. "Many of the senators in previous lives were in state legislatures that created these plans."
Sen. Chuck Grassley (R.-Iowa) is a big supporter of this legislation. About 65 senators and 125 representatives have agreed to co-sponsor bills in their houses.
Every state has at least one 529 plan, and almost 30 states give additional tax or other benefits, like a state tax deduction to residents.
"American families applaud Congress for supporting these bills in such large numbers," said Jackie Williams, executive director of the Ohio Tuition Trust Authority and chair of the College Savings Plans Network. "We are excited to see the bills receiving such an enthusiastic response. I hope this bipartisan support will soon result in the passage of this much-needed legislation. Repealing the sunset of the 529 plan tax exemption will help ease the tax burden on families struggling to save for their children's higher education expenses."
"I think that lack of clarity about the permanency has been a shadow, and I think removing it would be a good thing," said Andrea Feirstein, president of New York-based AKF Consulting.
Critics of the legislation say that all this confusion due to the legislation has negatively affected the sale of 529 plans
"The uncertainty causes people to sit on the fence," Williams said.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.