I want to invest in a tax-deferred account for my children's college education. Do we have this plan in CA? If so, can I invest in any vendor's 529 plan, even though they offer only other state's plans? What would benefit me the most?
California's 529 plan is called ScholarShare. If you are a California resident and invest in the California state plan, your qualified earnings and distributions are free of federal and California state income taxes. You can invest in any state’s plan, regardless of where you live, and still take advantage of federal tax benefits. However, you may not be able to take advantage of state tax benefits outside your own state. You should compare the investment options available and the fees of all plans you are interested in before choosing one that is best for you and your children. Learn more about 529 plans.
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