Obama proposes scaling back benefits of 529 college savings plans

Obama is proposing to make the expanded version of the American Opportunity Tax Credit permanent. The credit, a dollar-for-dollar reduction of your tax bill, is worth up to $2,500 a year for qualified education expenses.

The president also wants to increase the $1,000 refundable portion of the AOTC to $1,500. The refundable portion is the credit you would get even if you don’t owe any tax. He also wants to make the credit available for five years of college instead of four.

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