While Learning Quest is a nationally competitive and well-managed plan, Kansas residents will now be able to utilize the annual adjusted gross income deduction of up to $3,000 per beneficiary ($6,000 if married and filing jointly) for contributions made to whichever 529 college savings plan best meets their investment objectives.
Numerous states have introduced parity efforts in their legislatures, but typically they die before becoming law. Resistance to parity legislation often comes from states citing tax revenue loss or wanting to protect the in-state 529 college savings franchise. Jenkins proposed this legislation and effectively advocated for providing Kansas residents with more choices and enhancing competition in the 529 industry.
Tax parity is an advantageous way for states to help families catch up with escalating college costs. The tax deduction will help level the playing field among college savings plans, challenging program managers to shape programs competitively, which will ultimately provide the best savings plans for consumers.
Doug Lockwood is vice president of investor guidance for American Century Investments. – NU