Treasurer Garrity News

Treasurer Garrity: Adding Funds in August Can Boost PA 529 Guaranteed Savings Plan Investments

Treasurer Stacy Garrity today reminded families who have PA 529 Guaranteed Savings Plan (GSP) accounts that contributing by August 31 can boost their savings by taking advantage of the fact that many college tuition credit rates are scheduled to increase on September 1.

“This month is a great time to make additional contributions to your PA 529 GSP account,” Garrity said. “And for anyone thinking about opening a new PA 529 GSP account, August is also the perfect time to do that. Saving now, before this fall’s tuition rate increases go into effect, is a fantastic way for parents and families to optimize their education savings.”

The PA 529 GSP program allows families to save for a future education at today’s cost. In other words, if you save enough for a semester today, you’ll have enough for a semester at that school in the future – no matter when or how much tuition has gone up in the meantime. That makes an investment by August 31, before the new GSP credit rates go into effect, especially valuable.

PA 529 GSP account owners can choose from a variety of college tuition levels to save at, from a PA community college average to an average of Ivy League universities.

Because the effect of tuition inflation is generally applied to PA 529 GSP accounts on September 1, contributions made by August 31 often receive an increase in value the very next day – and the earnings can be used as soon as the summer semester of the next calendar year. If used the following fall semester, two years of tuition inflation benefits would be available.

Before new PA 529 GSP credit rates take effect for the 2022-23 school year, families may compare PA 529 GSP credit rates at popular levels.

To help families save even more, Treasury is waiving asset-based fees for PA 529 GSP account owners during the current fiscal year (July 1, 2022, to June 30, 2023). In addition, PA 529 GSP account owners with account contributions of $100 or more as of June 30, 2022, received a deposit of $100. These fee waivers and deposits are funded by PA 529 GSP surplus earnings, using no tax dollars.

“I’m always looking for ways to make PA 529 work even better for Pennsylvania families,” Garrity said. “By waiving fees and providing the additional $100 deposit, I want to let Pennsylvanians know that we view Treasury as a partner in their efforts to save for their children’s future.”

The PA 529 College and Career Savings Program is designed to help Pennsylvania families steadily and strategically save for future educational expenses. Treasury offers two plans: the PA 529 GSP, and the Morningstar Silver Rated PA 529 Investment Plan, which offers a variety of investment options.

PA 529 plans have significant state and federal tax advantages and can be used for a wide variety of qualifying technical, collegiate, apprenticeship and K-12 educational expenses. To learn more, visit pa529.com or call 800-440-4000.

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PA ABLE Surpasses $75 Million Savings Milestone

Treasurer Stacy Garrity today announced that the PA ABLE Savings Program has surpassed $75 million in assets for the first time. PA ABLE (Achieving a Better Life Experience) is a tax-free way for Pennsylvanians with qualifying disabilities and their families to save without affecting eligibility for government disability benefits. Funds are easy to access and may be used for a wide range of disability-related expenses.

“The fantastic growth in our PA ABLE program shows how important these accounts are for Pennsylvanians with disabilities and their families,” Garrity said. “It’s especially exciting to reach this milestone during August, which is ABLE to Save Month – a time to educate people about the power of PA ABLE, and how PA ABLE accounts can help Pennsylvanians with disabilities gain independence and improve financial wellness.”

“For more than 5 years, PA ABLE has helped thousands of Pennsylvanians with disabilities save for their future without fear of losing their disability benefits,” U.S. Senator Bob Casey said. “Those savings have now surpassed $75 million. That is money people with disabilities can use to pay for rent or groceries, to plan for large expenses related to their disability or to save for future goals like buying a home or starting a business. Now, I am working in Congress to pass the ABLE Age Adjustment Act so that even more Pennsylvanians with disabilities can save money to support themselves and achieve their goals.”

“PA ABLE was a very good idea in its conception, and it is proving exceptionally positive and productive in its application,” Senator Lisa Baker said. “The program is a big help for families planning a better future for a loved one with a disability. To their credit, Treasurer Garrity and her staff run these programs in a fiscally sound and cost-effective manner.”

PA ABLE was created by state legislation with leadership from Sen. Baker and former Rep. Bernie O’Neill following the federal passage of the ABLE (Achieving a Better Life Experience) Act of 2014 – spearheaded by Senator Casey – which gave states the authority to create ABLE programs.

Nearly 7,000 Pennsylvanians have saved $75.3 million for disability-related expenses since the program opened in 2017.

PA ABLE allows for up to $16,000 in savings per year and up to $100,000 lifetime savings without impacting government benefits. Tax benefits include no federal or state income taxes owed on earnings or qualified withdrawals; a PA state income tax deduction for contributions up to $16,000 annually; and exemption from PA inheritance tax.

The program offers six investment options and an interest-bearing checking account. Qualifying disability expenses can include education, housing, transportation, assistive technology, health care, financial management, and more.

To be eligible for PA ABLE, a person’s disability must have occurred prior to their 26th birthday. The ABLE Age Adjustment Act, being considered by Congress, would raise the age limit for eligibility to 46. This would expand ABLE account access to about six million more Americans, including an estimated one million disabled veterans. The legislation was introduced by Pennsylvania Senator Bob Casey and is cosponsored by Pennsylvania Senator Pat Toomey. A House version has also been introduced and is cosponsored by a bipartisan group of 15 members from the Pennsylvania delegation, more than any other state.

“The ABLE Age Adjustment Act will do great things to expand access to the program,” Garrity said. “As a veteran, I know PA ABLE can really benefit my brothers and sisters in service who made sacrifices we can never repay. I urge Pennsylvanians to let their representatives in Washington know this is a priority and should be passed as soon as possible.”

You can also learn more about PA ABLE by visiting paable.gov, emailing info@paable.gov or calling 855-529-2253.

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Treasurer Garrity Reminds Pennsylvanians About One-Time Bonus Rebates for Property Tax/Rent Rebate Program

Treasurer Stacy Garrity wants to make sure Pennsylvanians who use the state’s Property Tax/Rent Rebate Program know about the one-time bonus rebate that’s available this year.

Yesterday the Pennsylvania Treasury Department started sending the one-time rebate payments to eligible applicants who are set up to receive direct deposit. Paper checks will be mailed starting Friday, August 26.

“Sky-high inflation is hitting renters and homeowners hard all across Pennsylvania,” Garrity said. “With so many people struggling to make ends meet right now, Treasury is committed to sending out these payments as quickly as possible. I hope everyone who is eligible will apply for this relief, as the deadline has been extended through the end of the year. I commend the General Assembly and the Governor for designating American Rescue Plan Act funds to help some of our most vulnerable Pennsylvanians.”

The bonus rebate, approved as part of the Fiscal Year 2022-23 state budget, is funded by $140 million from the American Rescue Plan Act. Bonus rebates are equal to 70% of the original rebate amount for every claimant who is approved for a rebate on rent or property taxes paid in 2021.

Pennsylvanians who have already filed for a rebate this year do not need to take any additional action to receive the one-time bonus payment, which will be sent automatically.

Anyone who has not yet applied, or whose application is still being processed, beyond mid-August will receive one combined payment including the original rebate amount and one-time bonus. Program claimants can expect to receive a letter from the Department of Revenue detailing their bonus rebates. More information on the one-time bonus rebates can be found on Revenue’s website.

The Property Tax/Rent Rebate Program benefits Pennsylvanians age 65 and older, widows and widowers age 50 and older, and people with disabilities age 18 and older. The maximum standard rebate is $650. With the one-time bonus payment, those who receive the standard maximum rebate will receive an additional payment of $455, for a total of $1,105. Some homeowners may qualify for supplemental rebates. The program benefits about 400,000 Pennsylvanians each year with approximately $250 million in rebate payments. The program has dispersed more than $7.3 billion since it started in 1971.

The deadline to submit applications has been extended to December 31, 2022. Treasury began rebate payments on July 1. Payments beyond July 1 are being processed as applications are approved by the Department of Revenue.