TAX NEWS - JUNE 2009

Georgia Higher Education Savings Plan - georgia tax

The Department of Revenue does not administer Georgia's Section 529 Plan. Information about the Plan can be obtained at www.gacollegesavings.com or by calling 877-424-4377.

The purpose of the plan is to provide a tax-advantaged method of saving for post secondary education. For Georgia income tax purposes, the plan allows a deduction for up to $2,000 in contributions and a tax exclusion for the earnings when they are withdrawn in certain circumstances.

For tax years beginning on or after January 1, 2007, all taxpayers may contribute and deduct up to $2,000 on behalf of any beneficiary of a Georgia Higher Education Savings Account. Additionally, the federal adjusted gross income phase-out limitation is completely eliminated. Finally, a taxpayer is not required to itemize his or her deductions to make this adjustment to income. Contributions or payments for such taxable years may be made during or after such taxable year but on or before the deadline for making contributions to an individual retirement account under federal law for such taxable years.