A Gift of Education for the Kids. A 2022 VT Tax Credit for You.

Written by
Stephen Mease

Date
November 29, 2022

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Young kids faces for VT529

With Vermont’s state-sponsored 529 savings plan, you can give a gift that lasts far beyond the holiday season. VSAC encourages families to look ahead, and plan for their kids’ (or grandkids’) future education possibilities with a gift of 529 savings. Whatever the age of your loved one, whether an infant or a teen—or even in high school or college—you can benefit now from federal and state tax advantages for 529 contributions and savings: Deposits made into a VT529 account by December 31 qualify for a 10% Vermont state income tax credit for 2022.

 “College savings accounts are a powerful tool,” said Scott Giles, president and CEO of the Vermont Student Assistance Corp., the state-appointed administrator of Vermont’s official 529 savings program, the Vermont Higher Education Investment Plan, also known as VT529. “Education is one of the most important investments a student can make. That’s why we want to encourage families to save for college and other career training.”

Saving for future education now can help your kids (and grandkids) get ready for tomorrow’s opportunities, no matter what path they want to explore.

  • Studies show that students with even small amounts of savings are 3x more likely to pursue education after high school and 4x more likely to complete that training.
  • According to the latest college savings statistics, 83% of parents with children attending school pay for a portion of their children’s education costs.

Vermont’s 529 plan is a great place to start.

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Description automatically generatedWith VT529, you have a choice of six investment options, including age-based, principal plus interest, fixed-income, balanced, and equity funds. You may change the investment options as you save.   

529 funds can be used to pay for tuition, room, and board (both on and off campus), books, and many other costs of college or training, including apprenticeships and credential programs. The funds are viewed favorably for financial aid, and there’s no age or time limit: 529 plan funds can be used for graduate or adult education, too, and can be transferred to another beneficiary at any time. Plus, up to $10,000 can be used to pay off a student’s education loans. Learn more about all the flexible features of 529s.

Maximize your 2022 Vermont tax credit.

Named after Section 529 of the Internal Revenue Code, 529 plans help families set aside funds for future college or training costs, with federal and state tax advantages to help make saving easier. A Vermont 529 account can make saving accessible for families at most income levels, and those savings can grow tax-free.

As Vermont’s official state-sponsored 529 savings plan, VT529 is the only savings program that qualifies Vermont taxpayers for a Vermont state income tax credit on annual contributions for education after high school. Deposits made into a VT529 account by December 31 qualify for a 10% tax credit on contributions up to $2,500 per beneficiary per year ($5,000 if filing jointly). That’s a Vermont tax credit of up to $250 (or $500 for joint taxpayers), per beneficiary per year.

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Description automatically generatedEasy ways to give.

Parents, grandparents, family members, and friends can contribute to an existing VT529 account with a give a gift of any amount or open a VT529 account with as little as $25 (or just $15 using payroll deduction).

Last-minute gifting? Consider purchasing or redeeming a VSAC Gift of College gift card, available at Vermont locations of Cumberland Farms and Kinney Drugs stores or online.

For more on saving for (and gifting) education opportunities with VT529, visit vsac.org/save.