Do you currently fund a Vermont 529 college savings plan? If so, don’t forget to fund it by December 31st to qualify for the 2016 tax credit. In addition, be sure to review whether you should make a 529 withdrawal for qualified education expenses by the same date.
Did you know?
As Vermont’s official 529 college savings plan, Vermont Higher Education Investment Plan (VHEIP) is the only 529 plan that qualifies for a VT state income tax credit.
- A state income tax credit of 10% of the first $2,500 contributed to VHEIP per beneficiary per tax year is available to any Vermont taxpayer (or, in the case of a married couple filing jointly, 10% of the first $5,000 contributed per beneficiary) – a tax credit worth up to $250 per beneficiary ($500 per beneficiary for married couples filing jointly).
- Rollovers from another state’s 529 plan into VHEIP are also eligible for the tax credit on the contributions portion of the rollover (not on the earnings portion). The funds must remain in VHEIP for the remainder of the tax year in order to claim the tax credit.
For more information visit www vheip.org.
Davis & Hodgdon Associates CPAs has been assisting Vermonters with tax savings strategies for more than 25 years. Call our office at (802) 878-1963 in Williston, Vermont or (802) 775-7132 in Rutland, Vermont for more information and to schedule a strategy session.
We highly recommend having a year-end projection completed to ensure that you are in the best possible position for your 2016 return.
Bret L. Hodgdon, Partner, Davis & Hodgdon Associates CPAs and family