{"id":211,"date":"2016-08-12T14:40:09","date_gmt":"2016-08-12T19:40:09","guid":{"rendered":"https:\/\/www.bowditch.com\/estateandtaxplanningblog\/?p=211"},"modified":"2020-07-31T13:25:43","modified_gmt":"2020-07-31T13:25:43","slug":"massachusetts-lawmakers-provide-tax-deduction-for-contributors-to-529-plans","status":"publish","type":"post","link":"https:\/\/www.bowditch.com\/estateandtaxplanningblog\/2016\/08\/12\/massachusetts-lawmakers-provide-tax-deduction-for-contributors-to-529-plans\/","title":{"rendered":"Massachusetts Lawmakers Provide Tax Deduction for Contributors to 529 Plans"},"content":{"rendered":"

On August 10, Governor Baker signed into law “An Act Relative to Job Creation and Workforce Development<\/a>” (H. 4569). This economic development legislation includes an income tax deduction for those who are saving money for college. Massachusetts residents have long enjoyed the tax-deferred growth offered by 529 college savings plans and we now join the majority of states in offering an income tax deduction in years when a contribution to a Massachusetts 529 plan is made. Beginning on January 1, 2017, taxpayers who contribute to a Massachusetts Educational Financing Authority (MEFA) U. Fund 529 college savings plan can deduct an equal amount capped at $1,000 for single tax payers, heads of household and married individuals filing separately and $2,000 for married couples filing a joint return.<\/p>\n

Taxpayers who are currently paying for higher education may want to first fund a 529 plan in order to receive the income tax deduction because withdrawals from the 529 plan can be taken at any time as long as they are used for qualified higher education expenses (tuition, room and board, books, and computer equipment).<\/p>\n

A beneficiary of a 529 plan should be aware, however, that any non-qualified distributions from his or her plan, unless due to the beneficiary\u2019s death, disability or receipt of a scholarship, will result in \u201crecapture of the deduction,\u201d in addition to a 10% federal penalty and ordinary income taxes on the earnings, which results when the plan is not used for qualified higher education costs.<\/p>\n","protected":false},"excerpt":{"rendered":"

On August 10, Governor Baker signed into law “An Act Relative to Job Creation and Workforce Development” (H. 4569). This economic development legislation includes an income tax deduction for those who are saving money for college. Massachusetts residents have long enjoyed the tax-deferred growth offered by 529 college savings plans…<\/p>\n","protected":false},"author":64,"featured_media":212,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false,"_links_to":"","_links_to_target":""},"categories":[10],"tags":[],"class_list":["post-211","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-taxes"],"acf":[],"yoast_head":"\nMassachusetts Lawmakers Provide Tax Deduction for Contributors to 529 Plans - Don\u2019t Tax Yourself<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.bowditch.com\/estateandtaxplanningblog\/2016\/08\/12\/massachusetts-lawmakers-provide-tax-deduction-for-contributors-to-529-plans\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Massachusetts Lawmakers Provide Tax Deduction for Contributors to 529 Plans - Don\u2019t Tax Yourself\" \/>\n<meta property=\"og:description\" content=\"On August 10, Governor Baker signed into law “An Act Relative to Job Creation and Workforce Development” (H. 4569). 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