News & Press Releases
Oklahoma tax deduction still available for college savings
OKLAHOMA CITY — With this year’s tax deadline extended, State Treasurer Randy McDaniel wants to remind Oklahomans that there is still time for a 2019 state income tax deduction by investing in their children or grandchildren’s higher education.
The deadline to file 2019 state and federal income taxes is Wednesday, July 15, and contributions made to an Oklahoma 529 College Savings Plan (OCSP) account through that date are eligible.
“Making contributions to an Oklahoma 529 College Savings Plan is something I encourage all parents and grandparents to consider,” said McDaniel, board chair for OCSP. “Not only is it the only 529 college savings plan that offers an income tax deduction for Oklahomans, it also offers excellent investment choices.”
According to a report from USA Today, the average amount families save for their child’s education is around $18,000, just enough to cover one year of higher education costs in Oklahoma.1 This shortfall remains a primary reason Treasurer McDaniel encourages saving for college as early as possible.
“Saving early shows children the value placed on higher education by adults in their lives,” said McDaniel. “To continue Oklahomans’ success in college and beyond, a strong foundation must be set. The Oklahoma 529 College Savings Plan exists to help parents and grandparents create a foundation that improves expectations and outcomes.”
It’s also never too early to get a head start on 2020 tax benefits, as state income tax refunds can be invested back into a child or grandchild’s Oklahoma 529 College Savings Plan.
Any OCSP earnings are federal and Oklahoma income tax free when used for higher education expenses such as tuition, living expenses, books, supplies and fees. Funds may be used at most private or public universities, colleges or career technology centers, nationwide. In addition, up to $10,000 per year may be used for tuition at private elementary and secondary schools.
For more information about the Oklahoma 529 College Savings Plan or to open an account, go to www.ok4saving.org or call (877) 654-7284.
Introduced in April 2000, the Oklahoma 529 College Saving Plan (OCSP) is Oklahoma’s direct-sold 529 college savings plan. It is designed for families who want to open and manage their own 529 college savings accounts. The Plan is managed by TIAA-CREF Tuition Financing, Inc. As of March 31, 2020, assets in in the Plan exceeded $875 million
Oklahoma taxpayers may deduct, from their Oklahoma adjusted gross income, up to $10,000 in contributions to the Oklahoma 529 College Savings Plan for individual taxpayers and up to $20,000 for taxpayers filing a joint return with a five-year carryforward. Read the Disclosure Booklet carefully.
1Nova, A. (2018, May 25). Parents have on average $18,000 saved for college, and that’s still not nearly enough. Retrieved from https://www.usatoday.com/story/money/personalfinance/2018/05/25/how-much-parents-have-saved-college/633279002/
Consider the investment objectives, risks, charges and expenses before investing in the Oklahoma College Savings Plan. Please visit www.ok4saving.org or call toll-free 1-877-654-7284 for a Plan Disclosure Booklet containing this and more information. Read it carefully.
Check with your home state to learn if it offers tax or other benefits such as financial aid, scholarships and protection from creditors for investing in its own 529 plan. Investments in the Plan are neither insured nor guaranteed and there is the risk of investment loss.
Consult your legal or tax professional for tax advice. If the funds aren’t used for qualified higher education expenses, a 10% penalty tax on earnings (as well as federal and state income taxes) may apply.
TIAA-CREF Individual & Institutional Services, LLC, Member FINRA, distributor and underwriter for the Oklahoma 529 College Savings Plan.
For more information, contact:
Tim Allen, Treasurer’s Office, (405) 522-4212
Addie Plank, Koch Communications, (405) 570-2959, email@example.com