Bigger 529 Contributions with New Tax Credit

(Financial Advisor IQ) American parents are using the boost in child tax credits to bulk up 529 college savings plans, according to a new survey by College Savings Foundation. Under the American Rescue Plan, parents will get a $3,000 tax credit for each child between the ages of six and 17 and $3,600 for children under six — that’s up from the previous $2,000 credit for children under 16. Around 58% of families intend to put some or all of the expanded tax credit toward 529s, according to the survey. Among those who do, 42% plan to put the money into existing plans and 30% plan to open a new account, the foundation found in a survey of 1,000 parents.

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