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How to use Child Tax Credit payment for College Savings

(Mississippi Treasury Department)
Published: Jul. 12, 2021 at 9:12 PM CDT
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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.

MAC account:

  • $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

MPACT account:

  • 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.

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