Utah taxpayers have until 5 p.m. Thursday to make tax-deductible contributions to valuable college savings plans.
Benefits for the year will run out with the year-end tax deadline, but Utahns can take advantage of additional savings incentives by contributing up to $1,740 to individual Utah Educational Savings Plan accounts. The tax benefits increase for joint filers to $3,480.
"The Utah state tax credit deadline is a reminder to Utahns to prepare financially for college expenses," said Lynne Ward, UESP director. The accounts, she said, are easy enough to manage to allow for saving whenever it is feasible.
UESP is Utah’s state-sponsored savings option available to comply with Section 529 of the Internal Revenue Code, and is administered and managed by the Utah State Board of Regents and the Utah Higher Education Assistance Authority. Earnings on each account are exempt from either federal or Utah state taxes when used for qualified higher education expenses such as tuition, fees, certain room and board costs and required books and supplies at any eligible educational institution that accepts federal financial aid, not just institutions in Utah.
Earlier this year, UESP was ranked by investment researchers at Morningstar as one of the top five 529 plans in the country. It has nearly $3 billion in assets and more than 149,000 accounts, with approximately 113,800 belonging to individuals outside of Utah. Ward said the program has undergone a number of improvements in the past year, including lower fees, new investment options and improved online account management.
UESP, she said, works for all families, regardless of household income.
To receive the 2009 Utah state tax credit, new account applications and contributions need to be submitted to the UESP office, located at The Gateway 2, Board of Regents building, 60 S. 400 West, Salt Lake City, by 5 p.m. on Dec. 31. Contributions can also be made online at uesp.org, or mailed to UESP at P.O. Box 145100, Salt Lake City, UT 84114-5100.
"With the year-end tax deadline approaching, now is the time to remind Utahns that saving for college with the Utah Educational Savings Plan shows our children that the decision to seek a college education is as important as the decisions we make regarding a career and family," said Utah Commissioner of Higher Education William Sederburg. "It requires long-term preparation."
To receive the tax credit, beneficiaries on the accounts must have been designated before turning 19. More information about the plan can be found online at www.uesp.org.