McRae: A 529 week to remember
By Treasurer David McRae
Tax advantaged education savings accounts have come to be known as 529 accounts. Why? No good reason other than they fall under Section 529 of the U.S. Tax Code. It’s wonky, I know. But don’t stop reading now, because I’m going to break down these accounts in a very real way.
One of the reasons I wanted to talk about this topic this week is because Thursday, May 29 is 5/29 Day – a time when even the calendar tries to remind you to look at these plans! Moreover, the U.S. House of Representatives just passed legislation to further expand this opportunity for families like yours.
But before I get there, let me back up a bit to explain what a 529 plan is. In Mississippi, we technically have two. The first is called MACS. This operates like a savings account. You make a deposit, earn tax-advantaged interest, and take the money out when you’re ready. The money in this account can be used for a variety of things, including K-12 education, new laptops or educational materials, vocational training, tuition, and much, much more. To learn more, visit treasury.ms.gov/macs
The second is called MPACT. This is a prepaid tuition plan, meaning you lock in your college tuition rates today, make set payments over the coming years, and then attend college with your tuition already paid! MPACT enrollment happens in seasons, and the 2024-25 season will end on May 31. If you are interested, I highly encourage you to enroll before month’s end to avoid any cost increases that may come when the plan re-opens in September. To learn more, visit treasury.ms.gov/mpact.
These programs have already helped thousands of Mississippi families over the years, but the House’s One, Big Beautiful Bill sweetens the pot even further. Should the bill become law, seven new items could become eligible to buy with one’s MACS account. This includes homeschool curriculum, online educational materials, tutoring, educational therapies for students with disabilities, and more. It also makes job-training credentials 529 eligible.
For those who take advantage of ABLE accounts (created for families with disability-related expenses), the flexibilities granted on these accounts in the 2017 tax bill will be permanent.
Presumably on President Trump’s request, the legislation also creates a new savings program (separate from the 529 accounts). Any family with a child under eight would be eligible to open an account and could save up to $5,000 per year.
Every family has a different capacity, schedule, and need when it comes to saving for the future. This 529 Day (May 29), I hope you take the opportunity to evaluate how you’re saving and what you’d like to save for. If anything education-related is on your savings list, please reach out to my team and we’d be happy to assist.
Mississippi Treasurer David McRae is the 55th Treasurer for the State of Mississippi. In this role, he helps manage the state’s cash flow, oversees College and Career Savings Mississippi, and has returned more than $100 million in unclaimed money to Mississippians. For more information, visit Treasury.MS.gov
