Treasurer Smith Announces Historic Updates for Iowa’s 529 Plans

DES MOINES, Iowa - State Treasurer Roby Smith is thrilled to announce historic updates across Iowa's 529 plans. Recent state legislation has increased the tax deduction amount up to $5,500 for contributions to Iowa's two 529 plans, College Savings Iowa and the IAdvisor 529 Plan, and IAble, Iowa's Achieving a Better Life Experience (ABLE) plan. "This exciting update is a great way to save for others while giving yourself a tax benefit as well," Smith stated. "I'm thrilled to continue to help Iowans save for their loved one's future expenses while also continuing to help you save on your own taxes."

"Iowa is fast becoming one of the nation's most tax-friendly states, so it makes good sense that all areas of state government consider how to further reduce the tax burden on hardworking Iowans," said Governor Kim Reynolds. "Treasurer Smith's effort to increase tax deductions and provide greater flexibility with state plans will help incentivize college and retirement savings for Iowa families."

In addition to the new tax deduction amount, Iowa's 529 account owners will have the ability to transfer up to a lifetime limit of $35,000 to a Roth IRA in the beneficiary's name. While this previously passed on the federal level to be effective as of January 1, 2024, Iowa approved the change during this year's legislative season to follow the same rules.

"It's an exciting time for the State's 529 plans! Serving Iowans with their savings goals, our programs continue to grow and get better and better each year," said Smith. "With these updates, it's opening the doors for more families to start saving."

Smith also recently announced reduced fees for College Savings Iowa account owners. The price reduction brings the asset-based fees of College Savings Iowa's investment options down to 0.17%. This means account owners pay only $1.70 per year for every $1,000 invested.

To learn more about the various programs from the Treasurer's Office, visit IowaTreasurer.gov. Connect with the Treasurer on Facebook, Instagram and X to stay up-to-date on all areas of the office.

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