Idahoans saving for college can get higher tax deductions

BOISE — Idaho just made paying for college a little easier on your taxes.

Idahoans saving for college using Idaho’s College Saving Program, IDeal, can now deduct more from their state taxes. HB185, signed into law by Gov. C. L. “Butch” Otter on March 20, will go into effect in July of this year.

“We’ve set high goals for improving on the number of Idahoans who go on to higher education,” Otter said in a news release. “This legislation will help us achieve those goals.”

According to a news release from IDeal, Idaho taxpayers in the highest tax bracket will now be able to deduct a maximum of $6,000, if filing as an individual. A married couple filing jointly can deduct a maximum of $12,000. That’s a potential tax savings of $444 for individuals and $888 for joint filers.

The IDeal savings program began in 2000. Since then, tuition costs have risen by an average of 189 percent nationally. The increased tax deduction is a direct response to that rising cost.

“I love how this program supports our Idaho colleges and universities,” said Rep. Caroline Nilsson Troy, the bill’s sponsor. “The top 10 schools where these savings are spent is at our own higher education institutions.”

The press release states money saved in an IDeal account can be used to pay for room and board, tuition fees, books and computers at any accredited post-secondary school within the United States. These qualified withdrawals are free from state and federal taxes on investment earnings.

“Idaho employers need more well-educated workers for increasingly technical jobs in our growing economy,” Otter said. “That means we need to do more to empower individuals and families to start preparing early for the financial requirements of a college education.”

An IDeal savings account can be set up online with as little as $25. Multiple accounts can be opened, one for each beneficiary. Individuals preparing for college can open their own account as well, according to the IDeal website.