Gov. Engler approved a bill in June that will allow parents to make tax-deductible contributions to savings accounts designated for higher education expenses. The bill passed the House and Senate in May by unanimous votes.
The minimum investment to start an education savings account is $25, and there are no regular deposits required to maintain the account. Contributions up to $5,000 per taxpayer- $10,000 per joint tax return- may be deducted from state taxes every year. Deposits are limited to $125,000 per year. The accounts may be used to cover any post-high school education costs, including tuition, room and board, class fees, and books.
The education accounts will be available in early 2001, according to the Michigan Department of Treasury.