Pennsylvania Offers Parity to 529 Plan Investors;
Maine and Kansas to Follow
Pennsylvania Governor Rendell signed a bill on July 6, 2006 making PA residents the first in the nation to receive a state income tax deduction for contributions to any state’s 529 plan. Pennsylvania residents can deduct up to $12,000 per beneficiary per year from state income tax. Maine and Kansas have enacted similar legislation that will become effective next year.
This means that Pennsylvania residents may now invest in an out-of-state 529 plan such as the Montana or Arizona CollegeSure Plan and still may take advantage of the state income tax deduction.