Deadline nears for higher-ed tax credit

With budget belts tightening all over the state, one investment option allows contributors to get money back this year.

The Dec. 31 deadline to get a tax credit on money put away for college is fast approaching, and Utah Educational Savings Plan offices plan to be open late enough all week to accommodate anyone interested.

"Starting a Utah Educational Savings Plan account now is a simple and affordable idea for the holidays," said director Lynne Ward, adding that contributors can qualify for a 5 percent tax credit on money put into an account incorporated with a 529 plan sponsored by the state of Utah.

"This is a no-brainer plan for Utah residents," she said.

There are no minimum dollar requirements to qualify for the credit, however, contributions must be received in the UESP office before 5 p.m. Wednesday to claim it for this year.

Utah account owners can claim a tax credit of 5 percent on up to $1,650 ($3,300 for married couples filing jointly) of their yearly contributions. This means that the Utah tax credit is worth $82.50 per beneficiary. The credit must also be claimed on accounts belonging to beneficiaries under age 19.

UESP allows online enrollment and contribution options, at uesp.org, making it easy to participate in one of the highest-acclaimed programs in the country, Ward said.

"I like the investment selection, and the state tax credit means quite a bit to me," said Tom Owen, a UESP account owner. "Having a state tax credit means you can start saving early and accumulate funds faster."

The state tax credit is one of several benefits having an account elicits for owners and beneficiaries. Earnings on the accounts are also exempt from state and federal taxes when the funds are used for qualified higher-education expenses.

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E-mail: wleonard@desnews.com