What are the income tax benefits of investing in a nowU college savings plan account?
What are the gift, estate and inheritance tax benefits of investing in a nowU account?

What are the income tax benefits of investing in a nowU college savings plan account?

• Earnings grow federal income tax-free - Earnings grow tax-deferred and are free from federal income tax when used for qualified higher education expenses.*
• Earnings grow state income tax-free - For Pennsylvania taxpayers, earnings grow tax-deferred and are free from Pennsylvania state income tax when used for qualified higher education expenses*. More info
• Pennsylvania state income tax-deductible - Pennsylvania taxpayers can deduct up to $12,000 in contributions per beneficiary per year ($24,000 if married filing jointly assuming each spouse had income of at least $12,000) from their Pennsylvania taxable income for the purposes of determining their state income taxes. More info

What are the gift, estate and inheritance tax benefits of investing in a nowU account?

• Federal gift tax - You can contribute up to $60,000 in a single year ($120,000 for a married couple filing jointly) for each beneficiary without incurring federal gift tax, provided you don't make any other gifts to that beneficiary in that year or in the following four years.
• Federal estate tax - If you die with money remaining in your account, it will not be included in your estate for federal estate tax purposes. However, if you choose to take advantage of the federal gift tax averaging option mentioned above and you die within five years of contributing, a prorated portion of the contribution will be subject to estate tax.
• Pennsylvania inheritance tax - Funds in the account are exempt from Pennsylvania inheritance tax. Depending on the relationship between the deceased Account Owner and the heirs, this can be a savings of up to 15% of the entire value of the account.

For more information, consult your tax advisor or estate-planning attorney.

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* The availability of tax or other benefits may be contingent on meeting other requirements. A withdrawal or a portion of a withdrawal not used to pay for qualified expenses may be subject to federal income tax and a 10% federal penalty tax, as well as state and local income taxes.