College Savings- If you live in Colorado, are you maximizing your benefit from the state?

Chad Stevens, CFP® |

Colorado has one of the country's most generous education savings plans in the country. The 529 program allows you to save for college tuition in a tax-deferred account. If you use the funds for education, then the gains on your savings are tax free. Contributing to a 529 plan also gives you a Colorado state tax deduction that serves as an additional encouragement for you to save for college.

In 2020 there was a new program rolled out for kids born on or after January 1st, 2020. This is called the First Step program. The state will reward you $100 for simply opening the 529 account within the first 5 years of the child’s life. In addition to this benefit, you are eligible for the state matching program. This will match your contribution dollar for dollar up to $1,000 for the first 5 years of your contributions. There is no income phase out on this benefit and anyone with a child born in 2020 or after should enroll.

If you or someone you know has a little one running around, reach out to us and we’ll be happy to assist you with opening a 529 education savings account and getting you approved for the matching program.

(Please note, this information is intended to be general in nature and should not be taken as individual tax advice. We suggest that you reach out to a qualified tax advisor to discuss your specific tax situation.)