Illinois Treasurer warns of college savings tax penalties
SPRINGFIELD, Ill. (AP) —
Illinois Treasurer Mike Frerichs says families in the state that have college savings plans won't get a break on their state taxes if they use those accounts to pay for private K-12 tuition.
Frerichs warns that families with Bright Start or Bright Directions college savings plans, who attempt to claim that deduction, could potentially face a tax penalty from the state.
The Journal Star reports that the savings programs aim to incentivize taxpayers to put money aside for college tuition.
The Illinois Department of Revenue agrees with Frerichs' analysis, saying the state plans to "only allow expenditures on post-secondary education without penalty."
Frerichs says that there are more than 450,000 accounts in Illinois, with about $9 billion invested in them.