Alabama 529 Plan

From Bogleheads

Open to Residents
Not open to non-residents

Program match on contributions: None

State tax deduction or credit for contributions: Beginning in 2008, contributions to an Alabama 529 plan of up to $5,000 per year are deductible in computing Alabama taxable income.

State tax recapture provisions: A nonqualified withdrawal from an Alabama 529, plus 10 percent of the amount of the withdrawal, is included in Alabama taxable income to the extent of prior Alabama tax deductions. Alabama taxpayers must pay state tax on earnings rolled into an Alabama 529 plan. Alabama tax treatment of earnings rolled out of an Alabama 529 plan is unclear. Alabama law exempts qualified distributions from an Alabama 529 plan but does not exempt distributions from a non-Alabama 529 plan.

Age-based investment options: The Years to Enrollment option is offered in three different risk levels (Aggressive, Moderate, and Conservative) each containing five portfolios of underlying mutual funds. Contributions are placed into the portfolio corresponding to the risk level selected and the number of years to expected enrollment, and later reassigned to more conservative portfolios as the beneficiary approaches college age. [Van Kampen active funds]

Static investment options: Select among three multi-fund portfolios (Equity Portfolio, Bond Portfolio, and Short Term Income Portfolio) and 13 individual-fund portfolios within four asset classes (stock and bond, domestic stock, global and international, and bond).

Single Funds (ER 0.60%)

BNY S&P 500 Index Portfolio
BNY US Bond Market Index Portfolio

Expenses: 0.60% - 1.47%

Links

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Please see [url=http://www.bogleheads.org/wiki/Alabama_529_Plan]Alabama 529 Plan[/url] on the [url=http://www.bogleheads.org/wiki/Main_Page]Bogleheads Wiki[/url].