Giannoulias: Deposit stimulus checks in Bright Start

Deduct the contributions from your taxes next year

May 7, 2008

Illinois residents should consider investing their economic stimulus checks into a Bright Start College Savings account that could double their money in 10 years, State Treasurer Alexi Giannoulias said today.

In addition to earning interest on their investments, state residents can deduct Bright Start contributions on their state tax returns. Participants also pay no federal or state taxes on their earnings or withdrawals for qualified college expenses.

Bright Start is an easy-to-use and low-cost 529 college savings and investment plan sponsored by the Illinois State Treasurer’s Office and managed by OppenheimerFunds.

“If you are saving for retirement in a 401k, why not open a Bright Start 529 plan for your child?” said Giannoulias, noting that Morningstar, Inc. recently ranked Bright Start among the nation’s five best 529 plans. “You can open an account with your stimulus check and set up automatic deposits from your checking account in about 15 minutes. It’s that easy.”

Savingforcollege.com recently tracked the historical investment performance of age-based options in various 529 plans. According to the study, if a family invested a $1,500 rebate (the maximum amount for two parents and one child) into a 529 plan’s age-based option when the child is a newborn, and the plan duplicates its average returns until the child turns 18, the account will grow to $9,575.

The U.S. Treasury has begun sending economic stimulus payments to more than 130 million households. To receive a payment, taxpayers must have a valid Social Security number, $3,000 of income and have filed a 2007 federal tax return.

Eligible residents will receive up to $600 ($1,200 for married couples), and parents will receive an additional $300 for each eligible child younger than 17.

For more information or to enroll in Bright Start, go to www.brightstartsavings.com. For more information on the stimulus checks, visit www.irs.gov/index.html.

  
     
 
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