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Using a 529 plan can help you save tax-free dollars for college expenses. Here are the tax benefits you could get if you live in California.
If you use funds from a California 529 plan account for non-qualified purposes, the earnings portion of withdrawals will be taxed as ordinary income and may be subject to a 10% additional federal tax, as well as a 2.5% additional income tax in California.
8 gru 2023 · According to the Federal Reserve, California held about $13.8 billion in 529 plans in September 2023. And, you don’t need to be a state resident to participate. Keep reading to learn about California’s 529 and state tax deduction rules.
This bill would, under the Personal Income Tax Law (PITL), allow a qualified taxpayer a deduction from gross income for contributions made to a California qualified tuition program.
8 cze 2022 · A bill was introduced in 2019 to allow California taxpayers to deduct 529 plan contributions up to $5,000 ($10,000 if married filing jointly) from state taxable income. The bill was vetoed, but the state treasurer’s office is still working to get a state tax incentive approved.
If you use funds from a California 529 plan account for non-qualified purposes, the earnings portion of withdrawals will be taxed as ordinary income and may be subject to a 10% additional federal tax as well as a 2.5% additional income tax in California.
Here are the special tax benefits and considerations for using a 529 plan in California. Contributions. California does not offer any tax deductions for contributing to a 529 plan. Minimum: There is no minimum contribution. Maximum: Accepts contributions until all account balances for the same beneficiary reach $529,000.
