Pennsylvania 529 Plan
PA 529 Investment Plan
Morningstar GoldQuick Facts
- Expense Ratio
- 0.25%
- Fee Range
- 0.20% - 1.25% annual fees
- Tax Benefit Type
- Tax Deduction
- Deduction Limit (Single / Married)
- $17,000 / $34,000
- State Marginal Tax Rate
- 3.07%
- Carryforward
- None
- Income Limits
- No
- Any-State Deduction
- Yes
Should You Use Pennsylvania's 529 Plan?
Pennsylvania allows you to deduct contributions to any state's 529 plan, not just the in-state plan. This means you can choose the lowest-cost plan nationally and still claim the state tax deduction up to $17,000 (single) / $34,000 (married). Consider pairing a low-cost plan like Utah my529 with Pennsylvania's tax benefit.
Pennsylvania vs. Utah my529
Utah my529 is a commonly recommended low-cost reference plan. Here is how PA 529 Investment Plan compares.
| PA 529 Investment Plan | Utah my529 | |
|---|---|---|
| Expense Ratio | 0.25% | 0.13% |
| Morningstar Rating | gold | gold |
| Tax Benefit | State tax deduction up to $17,000 (single) / $34,000 (married filing jointly) | 5% tax credit on contributions up to $2,290 |
| Fee Range | 0.20% - 1.25% annual fees | 0.17% - 0.64% annual fees |
| Investments | Age-based and individual Vanguard funds | Vanguard age-based and individual funds |
How to Open PA 529 Investment Plan
You can open an account directly through the plan's website. You will need your Social Security number, the beneficiary's Social Security number, and your bank account information for funding contributions.
Frequently Asked Questions
What is Pennsylvania's 529 plan?
Pennsylvania's 529 plan is called PA 529 Investment Plan. It is a tax-advantaged college savings account that allows you to invest money for qualified education expenses. Earnings grow tax-free at the federal level, and withdrawals for qualified expenses are not taxed.
How much can I deduct on my Pennsylvania taxes for 529 contributions?
Pennsylvania allows a state income tax deduction of up to $17,000 per year for single filers and $34,000 for married couples filing jointly. With a marginal state tax rate of 3.07%, that could save you up to $522 per year.
Is Pennsylvania's 529 plan worth it?
It depends on your situation. PA 529 Investment Plan has an expense ratio of 0.25% and provides a state tax deduction for contributions. Since Pennsylvania allows deductions for contributions to any state's plan, you can choose a lower-cost plan and still claim the tax benefit.
Can I use an out-of-state 529 plan in Pennsylvania?
Yes. You can open a 529 plan in any state, regardless of where you live. The funds can be used for qualified education expenses at any accredited institution nationwide. Pennsylvania allows you to deduct contributions to any state's 529 plan, so you can use an out-of-state plan without losing the tax benefit.
What is the expense ratio for Pennsylvania's 529 plan?
The PA 529 Investment Plan has an expense ratio of approximately 0.25% for the age-based portfolio option. The full fee range across all investment options is 0.20% - 1.25% annual fees. For comparison, Utah my529 charges approximately 0.13%.