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New incentive for parents, grandparents, to start college savings account for kids

MNSAVES, Minnesota’s 529 College Savings Plan, announced a new $50 bonus for new accounts created between September 1st and December 31st of 2023.

MINNEAPOLIS —
We all know how expensive college can be, but most people have never heard of the special savings account created to help pay for it.

529 accounts offer parents, grandparents, and other relatives the unique opportunity to save money for a child’s education.

The money that is deposited into a 529 account can be invested into a variety of funds, bonds and other investment options.

That money can grow tax-free, as long as the money is used to pay for education, either K-12 or college.

Account owners can save thousands of dollars on taxes over the course of a child’s lifetime by using a 529 account.

Minnesota residents also have a new added bonus if they start a 529 account in 2023.

MNSAVES, Minnesota’s 529 College Savings Plan, announced a new $50 bonus for all new accounts created between September 1st and December 31st of 2023.

To qualify, the child must be born in the year 2023.

The initial deposit into the 529 account must be at least $50 and recurring payments must be set up for a minimum of six months with a minimum contribution of $25 a month.

To open an account visit mnsaves.org/newborn and use promo code SmartStart23

Additionally, Minnesota taxpayers who utilize a 529 account can save money on their state taxes through either a credit or a deduction.

MNSAVES says the deduction limit is $3,000 for a married couple filing jointly, and $1,500 for a single filer.

Account owners may also be eligible for a maximum credit of $500 a year depending on their annual income.

Besides MNSAVES, parents and relatives have several other options for 529 accounts, including accounts managed by other states.

Financial advisors say parents should weigh their options before choosing a policy because some plans offer lower fees and additional investment options that aren’t available in other plans.

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