DES MOINES, IA (02/25/2020) (readMedia)-- As Iowans begin their 2019 tax preparations, State Treasurer Michael Fitzgerald wants to remind them they can still contribute to their College Savings Iowa accounts for the 2019 tax year. "A great benefit for College Savings Iowa account owners is the state deduction they can take for their contributions," said Fitzgerald. "Iowa taxpayers still have time to maximize their 2019 state tax deductions by contributing to their College Savings Iowa accounts. Account owners can contribute and deduct up to $3,387 per account before April 30, keeping more money in their pocket this tax season."
Parents, grandparents, friends and relatives can all open College Savings Iowa accounts for a future or current scholar and deduct their contributions to their accounts every year. It only takes an initial investment of $25 to open an account, making sure as many families as possible can start saving for the future. Additionally, Treasurer Fitzgerald announced in January an increase in the state deduction amount for the 2020 tax year. Iowa taxpayers can deduct the first $3,439 they contribute per beneficiary account from their state taxable income in 2020.*
College Savings Iowa is designed to provide families a tax-advantaged way to save money for their children's higher education. Earnings grow tax free and participants can withdraw their investment federally and Iowa state tax-free to pay for qualified higher education expenses including tuition, books, supplies and certain room and board costs at any eligible college, university, community college or accredited technical training school in the United States or abroad.**
To learn more about College Savings Iowa or to open an account, please visit CollegeSavingsIowa.com or call (888) 672-9116. For more information about future giveaways and events find College Savings Iowa on Facebook and Twitter.
*Adjusted annually for inflation. If withdrawals are not qualified, the deductions must be added back to Iowa taxable income.
**Earnings on non-qualified withdrawals may be subject to federal income tax and a 10% federal penalty tax, as well as state income taxes. The availability of tax or other benefits may be contingent on meeting other requirements.