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Finally, a Massachusetts tax deduction for college savings

From the time I entered the financial-planning profession in 2007, one of my biggest gripes has been that Massachusetts did not provide an upfront tax break on college savings.

The state that is home to some of the best known universities in the world was among a minority of states that did not allow a tax deduction or credit for contributions to 529 college savings plan. This went on for more than a decade and I had given up hope we would ever see the kind of tax break offered to residents of states like Arkansas, North Dakota and Vermont.

Thankfully, my lack of faith in Massachusetts legislators was misplaced.

Last year, Governor Baker signed economic development legislation that included a new tax deduction for contributions to the Massachusetts UFund, the state-sponsored 529 college savings plan run by Fidelity.

The new deduction took effect Jan. 1. It allows single taxpayers (including heads of household and married individuals filing separately) to deduct up to $1,000 worth of UFund contributions in a given tax year. Married couples filing a joint return may deduct up to $2,000 worth of UFund contributions.

You can learn more about the Massachusetts UFund and the new tax deduction here: https://www.fidelity.com/go/529-Massachusetts/overview

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