Arizona enacts 529 tax deduction starting 2008

The Arizona governor has signed legislation (HB 2784) that permits Arizona taxpayers to deduct contributions to ANY 529 plan of up to $750 for a single or head of household or $1,500 for a married couple per year. The deduction first becomes effective in 2008 and is available for five years through 2012. Deductions will be subject to recapture with a future nonqualified distribution except for distributions following the beneficiary's death, disability, or receipt of a scholarship. Rollovers will not cause recapture.
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