James B. Urie, Esquire

On July 6, 2006, Pennsylvania Governor Edward G. Rendell signed a new bill into law that makes contributions to Pennsylvania's Guaranteed Savings Plan (GSP) or to another state's 529 plan deductible for Pennsylvania Income Tax purposes. Under the new tax legislation, any investor in Pennsylvania's GSP (parents, grandparents, relatives and friends) or any other 529 plan may deduct up to $12,000 in contributions, per beneficiary, on their state income tax return. Couples can deduct $24,000 per beneficiary. In addition, qualified distributions and rollovers from any 529 Plan are excluded from Pennsylvania income. The law is retroactive to January 1, 2006.

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