If there a college student or perhaps several college students in your future an upcoming change in the Ohio program may be of interest. Anyone can benefit from contributing to this program as long as you have a beneficiary listed when setting up the account. There is no annual contribution limit for the program, however, to avoid filing a GIFT TAX return the contribution should not exceed $14,000 ($28,000 for joint filers) in 2017. Contributions must be made in cash and can be made in smaller amounts.
You are the account owner and have control over the account and can change beneficiaries if all the savings are not used for educational purposes. You can transfer the account to another eligible member. Because earnings in this plan accumulate tax free and withdrawals if used for qualified education expenses are ALSO tax free, this is an excellent program for anyone to open for a deserving student.
This type of an account is considered an asset of the account owner (you), therefore, it is not generally considered when the student applies for financial aid at the school of choice.
Now the benefit for you the account holder. For the tax year 2017 you can take up to an OHIO tax deduction of $2,000. per beneficiary for contributions made in 2017. Additional contributions can be carried over to 2018 and beyond.
STARTING IN 2018 THIS DEDUCTION INCREASES TO $4,000. PER BENEFICIARY.
Please keep this increase in benefit in mind when considering opening or continuing to donate to a college savings plan.