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IOWANS: DON'T MISS YOUR 'COLLEGE SAVINGS IOWA' DEDUCTION
April 04, 2007
Many Iowans overlook the tax benefits available when you save for a child's education through College Savings Iowa. CSI is a "Section 529" plan sponsored by the state. It qualifies for the usual federal Section 529 benefits: earnings on plan funds grow tax-free, and they can be withdrawn tax-free to cover college costs.
CSI has an additional benefit for Iowa taxpayers: contributions can be deducted on Iowa returns - up to $2,500 per donor, per donee for 2006. That means a two parents with two kids can put away $10,000 in CSI for college and deduct it on their Iowa returns. The deduction is not available for contributions to other Sec. 529 plans.
You claim the deduction on Line 24 of the Iowa 1040 - the "other adjustments" line.
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