Oklahoma 529 College Savings Plan

Tulsa World (KRTBN)

Knight Ridder/Tribune Business News - KRTBN

Copyright (C) 2005 KRTBN Knight Ridder Tribune Business News

Jun. 28--State taxpayers have more reason than ever to set up an Oklahoma College Savings Plan for their children and grandchildren.

An expanded tax deduction, recently signed into law, allows taxpayers to deduct up to $10,000 per year from their Oklahoma taxable income for contributions to Oklahoma's plan. Couples filing jointly can deduct up to $20,000 per year.

Previously, the annual limit was $2,500 per contributor per account.

Oklahoma is among many states that offer long-term college savings plans, known as 529s.

Contributions to the Oklahoma plan grow free from federal and state income tax.

And withdrawals are free from federal and Oklahoma income taxes if used for qualified higher-education costs.

Qualified expenses include tuition, fees, certain room and board costs, books, supplies and equipment.

The plan also offers a choice of investment options and the flexibility of using the savings at any qualified higher education institution in the United States and abroad.

"As a matter of policy we want to encourage more people to open these kinds of plans," said State Treasurer Scott Meacham. "We felt if the limit was higher that more people would put more money in."

Many Oklahomans extend their education beyond high school, and "this is a great opportunity for them to create not only a tax advantage for them but a savings pool for their children and their grandchildren for their future education needs," said Meacham, who serves as chairman of the plan's board of directors.

The expanded tax deduction is part of Senate Bill 448, which Gov. Brad Henry signed into law earlier this month. While serving as a state senator, Henry authored the original legislation that created the college savings plan.

The measure also creates a five-year carry-forward provision. Contributions not deducted in the year they were made can be carried forward as a deduction any time over the succeeding five years.

Currently, the Oklahoma 529 plan has more than $130 million in total assets, up 13 percent since the end of last year. The current number of accounts has grown to more than 26,000, up 7 percent.

An overwhelming 92 percent of account owners live in Oklahoma, and the average account balance exceeds $5,000.

Information about the Oklahoma College Savings Plan is available at www.ok4saving.org or by calling (877) 654-7284.

The plan is administered by a board of trustees, with TIAA-CREF Tuition Financing Inc. serving as program manager.
 

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The tax information contained on the OCSP Web site is not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding tax penalties that may be imposed on the taxpayer. It was written to support the promotion of the products and services addressed in the Web site. Taxpayers should seek advice based on their own particular circumstances from an independent tax advisor.

The Oklahoma College Savings Plan (OCSP) is administered by the Board of Trustees of the Oklahoma College Savings Plan. TIAA-CREF Tuition Financing, Inc. (TFI) serves as Program Manager. TFI's affiliate, TIAA-CREF Individual & Institutional Services, LLC, is the distributor.

The investment approaches described are not recommendations and do not take into consideration personal goals or preferences. After evaluating information you consider important in making an investment choice, the ultimate decision is up to you. It is a good idea to revisit your investment strategy periodically as your goals, personal financial situation, and market conditions change.

Consider the investment objectives, risks, charges and expenses before investing in the Oklahoma College Savings Plan. Please call toll-free 1-877-654-7284 for a Disclosure Booklet containing this information. Read it carefully.

Before investing in a 529 plan, you should consider whether the state you or your designated beneficiary reside in or have taxable income in has a 529 plan that offers favorable state income tax or other benefits that are only available if you invest in that state's 529 plan.

The State of Oklahoma, its agencies, TIAA-CREF Tuition Financing, Inc., Teachers Insurance and Annuity Association of America and its affiliates do not insure any account or guarantee its principal or investment return. Account value will fluctuate based upon a number of factors, including general market conditions.

The OCSP Web site is for informational purposes only, and does not constitute an offer to sell or solicitation of an offer to buy any security that may be referenced on the site. Such offer or solicitation can be made only through the Disclosure Booklet.

The OCSP Web site contains links to other Web sites. Neither OCSP nor TIAA-CREF Tuition Financing, Inc. and its affiliates are responsible for the content of those other Web sites. The accuracy of information on those sites cannot be confirmed.

© 2008 TIAA-CREF Tuition Financing Inc.