529 Tax

Virginia State VPEP Guidelines For 529 Advantages

Since 1996, VPEP has helped families of children up through the 9th grade to save for college tuition and fees by providing the ability to lock in tomorrow's education at today's prices.

The collective investment commitments to higher education from participants in the program so far have grown to more than $ 450 million. The money invested in VPEP can be used at Virginia state-supported universities and community colleges to cover fully tuition and all mandatory fees.

In addition, VPEP contracts may be used at Virginia private colleges and at colleges and universities throughout the United States. VPEP benefits are guaranteed by the state and provide an unparalleled after-tax investment return when compared to other risk-free investments.

In addition to the federal tax advantages enacted by Congress, the Virginia General Assembly has provided Virginia taxpayers with two significant income tax benefits. The first is a tax deduction for every dollar invested in VPEP and VEST, which can be used to offset a participant's Virginia taxable income.

The deduction is taken over time with unlimited carry forward until the full investment has been deducted. New state tax legislation provides an acceleration feature for participants age 70 and over. The second state tax advantage comes into play as distributions for college expenses are made. Students are exempt from paying Virginia income taxes on VPEP and VEST earnings.

Parents and grandparents of more than 30,000 children have gained the peace of mind that comes with knowing they have set aside money for one of the largest expenses they will ever face. More than that, they have made an investment in their children's education that will pay dividends beyond dollars.

Participation in these plans sends a strong message to about the importance of planning for the future. Whether the commitment is a community college contract payment of $ 9 each month or a fully funded $ 100,000 VEST account, the message is clear. Education is worth saving for, worth budgeting for, and even worth sacrificing for.

Virginia's establishment and promotion of its 529 plans have encouraged families to focus on determining what type of savings vehicle best meets their investment philosophy and needs. Our success is measured not only by the number of participants in the Virginia College Savings Plan, but also by the number of people who were convinced to stop procrastinating and start saving for college.

529 Tax