TOPEKA - Kansans can now receive an annual adjusted gross income deduction of up to $3,000 ($6,000 if married, filing jointly) for contributions made to any 529 college savings plan in the nation. Senate Bill 432 was signed into law yesterday enabling families to invest in the Kansas Learning Quest 529 or an out-of-state 529 college savings program and receive the state's tax deduction for 529 contributions.
"This bill equalizes college savings for Kansans who want more options when investing for their child's college education," said Kansas State Treasurer Lynn Jenkins, CPA, who introduced the bill.
Many states give up-front state tax deductions or credits to residents who enroll in their own state-sponsored 529 plans. Until April, no state allowed residents to receive a tax break when investing in out-of-state plans. Now, Kansas joins only the state of Maine in giving a tax break to residents investing in either in-state or out-of-state 529 college savings plans.
"I commend the Kansas State Legislature for being at the national forefront in providing tax parity," said Jenkins. "And while I believe the Kansas Learning Quest college savings plan is competitive and well managed, Kansans won't be penalized if they choose another option that better meets their investment objectives," added Jenkins.
Financial industry trade organizations such as the College Savings Foundation in Washington, D.C. and the Securities Industry Association in New York and Washington, D.C. strongly support tax parity changes. The new law goes into effect in the 2007 tax year.
Jenkins, a former State Representative and Senator from Topeka, was elected Treasurer on Nov. 5, 2002. She is a Certified Public Accountant and former small business owner. Since being sworn into office in January 2003, Jenkins has expanded investment options in Learning Quest, initiated multiple financial literacy programs, and eliminated the reliance on state general fund dollars to operate the office.
The availability of tax or other benefits may be conditioned on meeting certain requirements, such as residency, purpose for or timing of distributions, or other factors.
Before investing, carefully consider the plan's investment objectives, risks, charges and expenses. This information and more about the plan can be found in the Learning Quest Handbook, available by contacting your financial advisor or American Century Investment Services, Inc., Distributor and Underwriter at 1-800-579-2203, and should be read carefully before investing. If you are not a Kansas taxpayer, consider before investing whether your or the beneficiary's home state offers a 529 Plan that provides its taxpayers with state tax and other benefits not available through this plan.
General information about Learning Quest is available by calling 1-800-579-2203 or by visiting learningquest.com. Investment advisors interested in Learning Quest Advisor should call 1-877-882-6236 or visit www.americancentury.com/ipro.
American Century Investments is a leading investment manager with nearly five decades of experience helping investors achieve their financial goals. For more information about the company, visit www.americancentury.com.
* Changes resulting from the 2001 Tax Act are effective through Dec. 31, 2010, and may or may not be extended past that date with further legislative action.
As with any investment, withdrawal value may be more or less than the original investment.
Notice: Accounts established under Learning Quest and their earnings are neither insured nor guaranteed by the State of Kansas, the Kansas State Treasurer or American Century Investments.
