What is the 529 TAX benefit in California ?

Question

I would like to invest in the 529 plans.

Does anyone know what is the 529 TAX benefit in California ?

Should I MUST invest in the "California Golden State ScholarShare College Saving Trust" ?

If I invest in the funds that in other states, like the AmericaFunds in Virginia, do I lost the tax benefit ?

It would be great if anyone could give me some suggestions or just pass me some useful WEB links.

Thanks

Jonathan in San Jose California

Answer 1

section 529 plans are sponsored by a state.
you may have state advantages in CA, not sure

there are many FEDERAL advantages even if there are no state advantages. i say that is a good enough reason to get one.

however, some states sponsor 2 programs, one is state funded like the one you are referring to, others are administered by mutual fund companies (like AIM for TEXAS, or ALLIANCE for DELAWARE) in the long run, these will be a better bet for you, sometimes state programs limit the amount of funding (or % of funding) to out of state universities

not to mention, what if CA goes bankrupt again when your kid is in school?

Answer 2

This is a great link for comparing plans, note that the federal tax benefits are the same, but different states offer some tax breaks as well (like an upfront deduction for your contributions or income exemption on withdrawals) in addition to the federal treatment. Some state tax benefits require that you are a resident taxpayer of that state.
http://www.savingforcollege.com/intro_to_529s/index.php?general_faq_id=3

Answer 3

No tax benefits in CA