Kids & Money

Some states still have matching money for college

Here’s something that sounds like a perfect fit for family game night over the holiday season. It’s called match play.

It’s not a board game. Rather, it’s a program operated by about a dozen states, including Kansas, Missouri, Arkansas and Louisiana, that provides matching funds to low- and middle-income families saving for their children’s college educations.

The program is linked to the popular state-sponsored 529 college savings plans, such as Learning Quest in Kansas and the MOST program in Missouri.

With the year winding down, some states still have matching money available. One of them is Kansas. Missouri’s program, however, is tapped out.

You’ll need to act before the year ends to apply and make a contribution to your 529 plan.

Wouldn’t it be a shame to leave money on the table?

The matching grant programs vary from state to state in terms of rules, eligibility, requirements and limits. But no matter how the programs work, you’re getting free money.

There are also potential tax benefits, since 529 accounts allow for after-tax contributions to be made on behalf of a designated beneficiary, such as your child or grandchild. These contributions grow tax-deferred, and potentially the funds can be withdrawn tax-free if used for qualified educational expenses.

One big catch: The grants are available only to eligible residents in that state.

is a good starting point for finding out the basics on state plans and how to get some of the cash. Or try your state’s 529 website.

Kansas, for example, provides a dollar-for-dollar match for contributions up to $600 in 2012 through what it calls its KIDS program, short for Kansas Investments Developing Scholars.

The Kansas Legislature provided $720,000 in funding this year for up to 1,200 matching grants. To qualify, applicants in a family of four, for example, must have federal adjusted gross income of no more than $46,100, or $30,260 for a family of two. Funds are still available, the state said, but the money is distributed on a first-come, first-served basis. Applications for the Kansas program and contributions to a Learning Quest 529 account must be postmarked by Dec. 31.

As part of the eligibility in Kansas, at least $100 must be contributed as an initial investment into a 529 account in 2012. You can also sign up for an automatic monthly investment of at least $25 through payroll deduction..

In January, the Kansas treasurer’s office, which oversees the 529 plan, will review the contributions and then deposit the matching funds into your 529 account.

This is also a gift that can keep on giving.

If you miss the 2012 deadline or want to receive another round of grants next year, states are likely to be kicking in matching dollars again. Missouri, for example, is already promoting its 2013 match.

There’s one other benefit to funding your children’s college education. You can teach them about investments and saving for long-term goals.