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Tax time is 529 time! Don’t forget to take your credit.
Attention all you Vermonters who are saving for college: Don’t forget to take your Vermont income tax credit when you fill out your taxes. Your contributions made during 2016 into the Vermont Higher Education Investment Plan can cut your tax bill.
VHEIP is Vermont’s official 529 college savings plan, administered by VSAC for the state. VHEIP is the only plan that provides a nonrefundable tax credit to Vermont taxpayers of 10 percent of the first $2,500 contributed per beneficiary, per year (a tax credit of up to $250 per beneficiary per year).
Joint filers can double that amount and take a 10 percent credit of up to $500 per beneficiary per year. (For specific info on the VT tax credit, go to http://vheip.org/how-tos/#claim-your-vermont-income-tax-credit.)
In case you’re wondering what to do with that tax credit, a reminder that this is a great time to add to your VHEIP account for 2017. Don’t yet have an account in Vermont’s 529 college savings plan? Open your VHEIP 529 account now (enroll online at www.vheip.org) to be sure to get the VT income tax credit on contributions made in 2017. VHEIP accounts can be started with as little as $25, making them an affordable option for college savings.
All Vermonters will need some form of education or training after high school to be ready for Vermont’s future jobs. We know that students from families who save even a small amount for education are three times more likely to continue their education. VHEIP has paid out $122 million to help 5,121 students over the years to continue their education.
Our goal is to provide families with a college savings plan that is affordable, accessible and flexible. It is encouraging to see so many students using VHEIP funds to continue their education! In addition to the tax credit, Vermont’s plan:
- is one of the most competitive and well-run 529 plans for its size
- includes strong performance on investments
- has the second lowest management fee among our peers
- offers Vermonters tax-free earnings and withdrawals for education
And – while we’re at it – some exciting news: VHEIP turns 18 this year, the same age as students heading off to college or other educational opportunities after high school graduation. It now has over 18,000 accounts. Investments in Vermont’s 529 college savings plan have reached another milestone, topping $300 million in assets.
VHEIP’s website, www.vheip.org, provides comprehensive account and program information, and includes online enrollment, e-gifting instructions and other services. Information and applications can also be obtained by calling 800-637-5860.