Some good news for those that are saving money for your kids using 529 plans or who have been considering beginning college savings with them. One sticky point for many people was that the federal tax deduction for the 529 plans was set to expire in 2010. Most people felt that this deduction would be would renewed, but since the law had it expiring in 2010, there was always a chance that it wouldn’t be.
Fortunately, this is no longer an issue. The Pension Protection Act of 2006 was passed in mid August and a portion of it makes the tax benefits for 529 plans permanent.