Compliance July 7, 2006

PA Institutes 529 Plan Tax Breaks

July 7, 2006 (PLANSPONSOR.com) - College Savings Foundation, the Washington, DC-based lobbying group for 529 educational savings plans, publicly applauded the State of Pennsylvania on Friday for enacting a new state tax deduction on 529 plan contributions.
Reported by

A news release said that the tax deduction, contained in a bill signed by Governor Edward Rendell, benefits Pennsylvania families who are saving for a future education. The tax treatment was effective on Thursday.

By investing in qualified tuition account programs, Pennsylvania families are eligible for as much as $12,000 per beneficiary in state tax deductions, in addition to the federal tax benefits, for contributions made to any qualified 529 plans. The bill also eliminates the so-called “back-end” disparity that previously did not allow state tax exemptions for distributions on out-of-state plans.

For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.


 “With the new qualified tuition account program tax breaks, it immediately becomes easier for families to save today for tomorrow’s education by allowing their investment to stretch,” Rendell said in a statement quoted in the news relase. “Qualified tuition account programs have always been a good deal for parents and others who are saving for higher education. The tax deduction contained in this year’s budget will make the plans even more attractive because parents will not have to pay tax on the money they set aside for higher learning.”

The new law also provides a state tax exemption for distributions from qualified tuition savings plans.  The law allows people to take a state tax deduction for their contributions to health savings accounts, and employer contributions won’t need to be reported as income.


Text of Pennsylvania S.B. 300 is available  here .

Compliance July 6, 2006

NH Law Extends Medical Coverage for Ill College Students

July 6, 2006 (PLANSPONSOR.com) - New Hampshire Governor John Lynch signed a bill that allows seriously ill college students to continue to be covered under their parents' health insurance policies if they can not maintain full-time student status.
Reported by

Business Insurance reports that the measure allows college students to retain coverage for up to 12 months after they take a medical leave of absence from school. Insurers may require the students’ attending physicians to provide documentation and certification of the medical necessity for the leave of absence.

According to Business Insurance, the law applies only to fully insured policies that commercial insurers and health maintenance organizations offer since state laws that relate to employee benefit plans are preempted by federal law.

For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.

The measure, called “Michelle’s Law” in memory of a Manchester, New Hampshire, college student who continued her studies while battling cancer to maintain health insurance coverage, went into effect late last month.

«