Paying for Education
Tuition for K-12 schools
529 Education Savings Plans
Many parents are aware of 529 education savings plans and how they can provide future earnings to help pay for their child’s college education. A new government act expanded the definition of education expense to include tuition for K-12 schools. As an added benefit, the state of Indiana offers a tax credit of 20% of the money you contribute to a 529 plan, up to $5,000 (resulting in a $1,000 credit).
The benefits of creating a 529 education savings plan for your child are numerous. The earnings of the fund accumulate tax-free and education related withdrawals are tax-free. Education expenses include K-12 tuition, qualified college and post-secondary training expenses like books, supplies and room and board. Should your child decide not to attend college, the fund can easily be transferred to another beneficiary. Parents, grandparents, and families all have the ability to contribute to your child’s 529 savings plan. The cost of maintaining the fund are very low.
Indiana Tax Credit
The state offers a 20% tax credit
The state of Indiana offers a tax credit of 20% of the money contributed to a 529 education savings plan, up to $5,000 resulting in a maximum credit of $1,000. This credit is available to anyone contributing to a 529 fund- parents, grandparents, or family and friends are eligible for the credit on their individual contributions.
This information means that you may use a 529 savings plan to pay for your child’s education at The Classical Academy and you could be eligible for a 20% Indiana tax credit for the contributions that you made to the account! Simply deposit the tuition into a 529 saving plan, wait at least 10 days for the money to clear, submit a withdrawal request from the 529 plan and use the withdrawal check to pay for your child’s tuition payment.
