Save on 2014 Taxes While Saving for College

As the end of 2014 approaches, there’s no better time to save on taxes while also saving for future qualified higher education expenses.

Utah taxpayers can enjoy a number of tax benefits by investing for college with the Utah Educational Savings Plan (UESP), Utah’s official nonprofit college savings plan. If they meet the December 31, 2014, contribution deadline, Utahns filing individual returns and Utah trusts may claim a 5 percent Utah state income tax credit for 2014 on UESP account contributions up to $1,860 (a maximum tax credit of $93) per qualified beneficiary. Joint filers may claim a 5 percent tax credit on contributions up to $3,720 ($186) per qualified beneficiary. Additionally, Utah corporations may qualify for a $1,860 Utah state income tax deduction.

Any contribution to an account for a beneficiary who was age 19 or younger when designated as the beneficiary qualifies for the 5 percent Utah state income tax credit or deduction up to the maximum credit or deduction. For example, a Utah account owner who contributes even $100 to a UESP account may claim a $5 tax credit. A $500 contribution qualifies for a $25 credit.

“Starting early and contributing even small amounts each month in UESP accounts can help families prepare for qualified higher education expenses,” says Lynne Ward, UESP executive director. “UESP makes it convenient to save for college. Opening an account is free, and there is no minimum contribution. Parents, grandparents, or other loved ones can save what they want, when they want.” 

UESP 2014 Year-End Deadlines

To qualify for the 2014 Utah state income tax benefit, Utah taxpayers must submit new Account Agreements and contributions by mail or deliver them by overnight carrier, in person, or by fax to the UESP office before 5:00 p.m., Mountain Time (MT), Wednesday, December 31, 2014. New accounts opened and contributions made online at uesp.org must be completed before 11:59 p.m., MT, Wednesday, December 31, 2014.

Account Agreements and contributions may be sent to UESP in the following ways:

  • Mail. UESP, PO Box 145100, Salt Lake City, UT 84114-5100
  • Deliver in person or by overnight carrier. UESP, Board of Regents Building, Gateway 2, 60 South 400 West, Salt Lake City, UT 84101-1284
  • Fax. 800.214.2956
  • Online. uesp.org

More Tax Benefits

In addition to the Utah state income tax credit, earnings on UESP accounts grow tax deferred, and withdrawals are free from federal and Utah state income taxes when used for qualified higher education expenses. Qualified expenses include tuition and fees; required books, supplies, and equipment; and certain room-and-board costs at technical schools, colleges and universities that participate in federal financial aid programs for students. Even some online classes qualify.

About UESP

UESP, Utah’s official nonprofit 529 college savings plan, is highly ranked by Morningstar Inc., Kiplinger’s Personal Finance magazine, Money magazine, CBS MoneyWatch.com, and consumer expert Clark Howard for its low fees and industry innovations such as its customized allocation investment options.

Accounts are free to open, and UESP requires no minimum deposit or account balance. UESP’s user-friendly website, uesp.org, makes it easy to open, manage, and contribute to an account online.

To learn more about the Utah Educational Savings Plan, visit uesp.org, call UESP toll-free at 800.418.2551, or email [email protected].