What are the gift, estate, and inheritance benefits of investing in a Pennsylvania 529 GSP account?
• Federal gift tax – You can contribute up to $65,000 in a single year ($130,000 for a married couple filing jointly) for each beneficiary without incurring federal gift tax, provided you don’t make any other gifts to that beneficiary in that year or in the following four years. • Federal estate tax – If you die with money remaining in your account, it will not be included in your estate for federal estate tax purposes. However, if you choose to take advantage of the federal gift tax averaging option mentioned above and you die within five years of contributing, a prorated portion of the contribution will be subject to estate tax.*** • Pennsylvania inheritance tax – Funds in the account are exempt from Pennsylvania inheritance tax. Depending on the relationship between the deceased Account Owner and the heirs, this can be a savings of up to 15% of the entire value of the account.
