College savings account passes House
Gov. Roy Barnes' bill that would allow Georgia residents to set up an education savings account unanimously passed the House Tuesday.
The bill lets parents and legal guardians make tax-deductible contributions to a college savings account.
Money put into the account must be spent on higher education, including things not covered by a HOPE scholarship, such as housing, meals and any other expenses associated with going to college.
Contributions to the college savings accounts will be capped at $8,000 a year, and accounts can hold no more than $120,000.
Up to $2,000 a year in contributions to the college savings account are tax deductible. But only those Georgians with an annual income of $50,000 or less can claim the $2,000 deduction.
The reason for the income cap, explains Barnes' floor leader Rep. Charlie Smith, is because "this is a plan to encourage savings for higher education for middle-income folks, not a tax dodge for wealthy folks."