State 529 Accounts on the Rise

529 college savings accounts and prepaid tuition plans reached record levels in 2013. A year-end report from the College Savings Plans Network shows total investments top $227 billion. State officials say Michigan has three Section 529 plans, all of which offer taxpayers a state income tax deduction on contributions and potential tax-free growth on any earnings if account proceeds are used to pay for qualified higher education expenses. Total assets in Michigan’s 529 plans reached $4.7 billion last year. The total number of Michigan 529 accounts opened in 2013 increased by 15%. The average Michigan 529 account size is $18,000. State Treasurer Kevin Clinton says with the cost of tuition increasing each year, Michigan’s 529 plans continue to be a smart and popular investment.