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| 529 college savings plans are one of the most popular accounts to fund your child’s higher education. The plans are named after Section 529 of the IRS tax code and were first introduced in 1986, but they became more widely used after George W. Bush’s Tax Relief Act was enacted in 2001. |
| Individual states will sponsor a plan and contract a program manager to facilitate the distribution of the account to the public. For example, the State of California uses Fidelity to offer its 529 plan called “ScholarShare.” |
| In its most basic form, a 529 plan allows you to save money for your child’s higher education since the earnings grow tax-deferred and withdrawals, if used for qualified educational expenses, are federal income tax-free. |
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