Tax advantages of 529 plans

Federal tax advantages of 529 savings plans:

• Earnings in the account grow free of federal taxes.
• Money in the account can be transferred tax-free to the 529 plan of a family member.
• Withdrawals are tax-free as long as the money is used for higher education.

State tax advantages of 529 savings plans:

Almost two dozen states offer state tax deductions to residents that contribute to 529 plans in their state.

They include: Colorado, District of Columbia, Georgia, Idaho, Iowa, Kansas, Louisiana, Maryland, Michigan, Mississippi, Missouri, Montana, Nebraska, New Mexico, Ohio, Oklahoma, Oregon, Rhode Island, South Carolina, Utah, Virginia, West Virginia and Wisconsin.

Source: Savingforcollege.com