How to use Child Tax Credit payment for College Savings
JACKSON, Miss. (WLBT) - College is expensive, but it doesn’t mean it can’t be made affordable.
According to the Mississippi Treasury Department, the average Mississippi student leaves college with about $30,000 worth of debt — a crisis that is only growing faster in Mississippi than almost anywhere else.
Consequently, the impact goes far beyond finances.
MTD says 30% of graduates end up delaying major life milestones because of debt.
Fortunately, there is a solution.
The Child Tax Credit has been around since 1997, with families eligible to receive $2,000 a year.
But an expanded version included in the American Rescue Plan, the wide-ranging COVID relief package recently signed into law, bumps the amount to $3,000 or $3,600, depending on income and the age of a family’s children.
These payments will come in monthly installments starting now until the end of the year.
Mississippi Treasurer David McRae says that the department has returned up to $30 million this year with over 10 thousand claims.
If you are a parent, there are two types of accounts you can open for your child.
The first is a MAC account which serves similarly to a savings account.
To get started with this tax-advantaged savings account, you would need as little as $25.
The other account is an MPACT account that allows you to lock in today’s tuition rates and pre-pay your child’s college tuition and related expenses.
- $25 to get started
- tax-advantaged savings account
- earn interest
- use for tuition, room and board, and books
- almost anyone — parents, grandparents, relatives, and friends can open an account and make contributions.
- can be used in-state or out-of-state
- allows parents to lock in tuition rates and pre-pay child’s college tuition
- use for college tuition and mandatory fees
- child’s age determines the price to open an account — click here to learn more
- a parent or legal guardian can open an account; however, anyone can contribute
- can be used in-state while out-of-state would require fees and penalties
To learn more, please visit treasury.ms.gov.
Copyright 2021 WLBT. All rights reserved.