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Arizonans have a new incentive to invest in 529 education savings plan

Arizonans have a new incentive to invest in 529 plans.

These tax-advantaged savings plans previously could only be used for tuition and other qualified education costs. Now, families can transfer unused funds from those plans into a Roth IRA account, with no tax penalty.

State Treasurer Kimberly Yee said the change in tax law gives her office another way to promote 529 plans, on top of her existing outreach to Navajo and Spanish language speakers.

In the past three years, enrollment rates have grown nearly 25%, according to Yee.

“The highest level of engagement has been for our Spanish-speaking communities,” she said. “And what's also amazing is that because we have shared that, it's not just for parents to gain that tax deduction. Grandparents are actually our highest engaged new group of individuals who are helping open accounts.”

Yee also emphasized that 529 funds can be also used to cover the cost of training and certifications outside of costs related to a traditional four-year university.

Yee says the Treasurer’s Office will also soon launch a Spanish language 529 website.

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Kirsten Dorman is a field correspondent at KJZZ. Born and raised in New Jersey, Dorman fell in love with audio storytelling as a freshman at the Walter Cronkite School of Journalism and Mass Communication in 2019.