Gregory Whitney | ScholarShare: Business Tax for Education
Quoting MP Suzette Martinez Valladares, “Nothing defines our future better than our investment in our children. We must allow parents to make choices. (Chronicle of the Signal of April 29). I agree, and a big step in that direction would be the passage of an Assembly bill to provide a tax credit or deduction for contributions to California’s 529 plan, ScholarShare.
California is only one of five states that does not offer a tax credit or deduction for their state’s 529 plan. People who live paycheck to paycheck could open a 529 plan for their child, making a small contribution each payday through automatic payroll deduction, if they could recoup some of their contributions in the form of income tax savings at tax time.
Governor Gavin Newsom brags that California is leading the country, but he alone is responsible for California’s retrograde failure to provide tax relief for 529 plan contributions. In 2019, the California legislature passed a bill authorizing a tax deduction on contributions; Newsom vetoed the bill, advocating instead a limited scope taxpayer-funded scholarship program. Given California’s huge fiscal surplus, why couldn’t we have done both? Remember Newsom’s action during the vote for governor this fall.
ScholarShare contributions grow tax-free and tax-free when withdrawn for college or professional training. Anyone can contribute: parents, grandparents, aunts, uncles or friends. There are many different investment choices, ranging from low risk to high risk.
Complete information on California’s 529 plan is available at Scholarshare529.com. The 529 plans are the cure for politicians’ crocodile tears over “crushing” student debt.