Senator McConnell Unveils Legislation to Make College Savings Plans More Accessible to Lower- and Middle-Income Kentucky Families
Press Release
U.S. Senate Republican Leader Mitch McConnell introduced legislation today to make it easier for Kentucky families to pay for their child's higher education. Senator McConnell's bill, the Enhanced 529-Setting Aside for a Valuable Education (Enhanced 529-SAVE) Act, will make 529 college savings plans more accessible to lower- and middle-income Kentucky families.
A 529 plan is a tax-advantaged savings plan that is designed to encourage Americans to save for future college costs. 529 plans can be sponsored by states, state agencies, or educational institutions and they are authorized by Section 529 of the Internal Revenue Code.
"My legislation will help families and individuals pay for higher education expenses, and I urge my colleagues to consider and pass this measure," Senator McConnell said. "I remain committed to making higher education more affordable and accessible for our nation's students, and this bill will help lower- to middle-income families and individuals in Kentucky save for their child's future."
Senator McConnell championed efforts to ensure that 529 plans would be 100-percent tax-free at the federal level. In 2001, he authored the Setting Aside for Valuable Education, or SAVE, Act, which was included in a tax package that became law. In 2006, he helped make permanent the tax benefits under these accounts.
The Enhanced 529-SAVE Act would make 529 plans more accessible by encouraging employers to contribute to an employee's 529 plan and up to $600 of the employer's contribution would be excluded from an employee's gross income. The Enhanced 529-SAVE Act would also create an incentive for lower-income families and individuals to save money for college by allowing the individual who contributes to the 529 plan to qualify for the Saver's Credit, which is an income-based, non-refundable tax credit up to $4,000.
The Enhanced 529-SAVE Act is similar to H.R. 529, introduced in the House of Representatives by Congresswoman Lynn Jenkins of Kansas.
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