WJTV News Channel 12 - No more tax deductions for NC's College Savings Plan in 2014

No more tax deductions for NC's College Savings Plan in 2014

Posted: Updated:
RALEIGH, N.C. -

Many changes to North Carolina's tax system are on the way in 2014. One of them is bad news for people who contribute to the NC 529 College Savings Plan.

Beginning next year, contributions made to the savings account will no longer be tax deductible.

Saving for college can be quite a challenge. Many states have set up what are called 529 Savings Plans to help make the process more manageable. They're almost like an IRA for college savings. Contributors set aside money that will earn tax-free interest.

Up until 2014, the state allowed individuals to deduct up to $2,500, and couples to deduct up to $5,000 of the money they contributed from their state taxable income.

The savings averaged anywhere from $200 to almost $400.

Next year, you can still use the program to save but contributions will no longer be tax deductible.

Some financial experts say this makes the 529, which was one of the best savings plan choices for North Carolinians, more of just another "okay" option.

CFNC must receive contributions by Dec. 31 for the contribution to qualify for a tax deduction.

Jonathan Rodriguez

Born in California but growing up in South Carolina, Jonathan Rodriguez joined WNCN in June 2013 as a digital journalist. More>>

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