Treasurer Fitzgerald Announces the New Deduction Amount for College Savings Iowa in 2010

• by State of Iowa Treasurer's Office

DES MOINES, IA (01/12/2010)(readMedia)-- State Treasurer Michael L. Fitzgerald announced today the new deduction amount for those saving for their children or grandchildren's higher education through College Savings Iowa. "This year, Iowa taxpayers can deduct up to $2,811 in contributions per beneficiary account from their adjusted gross income.* This means that a married couple with two children will be able to deduct up to $11,244 in 2010," stated Fitzgerald.

College Savings Iowa is an affordable way for families to save in order to meet the rising costs of higher education. It doesn't take much time or money to start saving through College Savings Iowa. It only takes $25 to open an account with subsequent contributions as low as $25. "I highly encourage all families to save what they can to help offset what has to be borrowed in the future. Any amount families can save may grow into something substantial over time," stated Fitzgerald. "For those who aren't already saving through College Savings Iowa, there is no better time to start than the present."

College Savings Iowa lets anyone – parents, grandparents, friends and relatives – invest for college on behalf of a child. Investors do not need to be a state resident and can withdraw their investment tax-free to pay for qualified higher education expenses including tuition, books, supplies and room and board at any eligible college, university, community college or accredited technical training school in the United States or abroad.** For more information about College Savings Iowa, call 888-672-9116 or visit www.collegesavingsiowa.com.

* 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.