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Institute Supports Illinois Education Savings Legislation
Washington, DC, February 21, 2007 - ICI strongly supports state legislation that will help encourage Illinois families to invest in Section 529 Education Savings Plans.
Illinois House Bill (HB) 376 encourages Illinois families to invest in qualified state tuition programs established under section 529 of the Internal Revenue Code. Specifically, the bill would amend the State Treasurer Act and the Illinois Income Tax Act to provide Illinois residents with an exclusion from gross income for amounts withdrawn from any state 529 Plan for qualified higher education expenses.
The Institute filed a letter supporting HB 376. ICI points out that, among other things, HB 376 would conform to federal law the Illinois tax treatment of qualifying withdrawals from 529 plans. The federal exclusion for qualifying withdrawals from 529 plans has had a major impact on the growth of these savings vehicles, and has encouraged American families to save for their children’s college education.
Recognizing the impact of federal law on the success of 529 plans, almost all states (except Illinois and one other state) already have conformed their state tax treatment of withdrawals to federal law. Federal conformity with respect to withdrawals will make it easier for Illinois families to save for college. In addition, federal conformity will simplify tax compliance for Illinois residents.
This site includes a section devoted to education savings issues and resources.