Little Rock, AR - The Arkansas 529 Plan Review Committee, sponsor of The GIFT College Investing Plan, announced a new state income tax deduction eligible to Arkansas taxpayers who contribute to The GIFT College Investing Plan.

This new benefit to residents of the state is the result of Act 1973 filed by Sen. Gilbert Baker and signed by Gov. Mike Huckabee. The new law gives Arkansas taxpayers the opportunity to make deductions up to $5,000 per year when making contributions to the GIFT Plan. For example, a married couple who each contribute $5,000 to a GIFT Plan account can each deduct $5,000 from their Arkansas taxable income, for a total household deduction of $10,000 per year. The new law applies to contributions made on or after January 1, 2005.

“This new state tax deduction is among some of the more generous 529 Plan benefits offered by states,” said Dr. Linda Beene, director of the Arkansas Department of Higher Education. “We believe it provides a great incentive for Arkansas families saving for college, and we encourage them to start taking advantage of it today,” she added.

This latest announcement comes on the heels of other enhancements made earlier in the year in conjunction with the selection of Upromise Investments, Inc. as the new program manager of the state’s 529 college savings program. A new lineup of investment options was also introduced from the mutual fund company, The Vanguard Group. As a result of the inclusion of Vanguard’s low-cost, broadly diversified funds, the plan’s investment costs were reduced, in some cases by 50 percent. Additionally, by joining the free Upromise® rewards service, investors in the GIFT Plan may now supplement their college savings by earning rebates through participating companies with their everyday purchases.

The Arkansas 529 GIFT Plan, with its new state income tax deduction and the Upromise’s rewards service, is just one of the opportunities Arkansans have to plan for a college education, according to Dr. Beene. The Arkansas Department of Higher Education also offers 10 state scholarship programs to provide financial assistance for a variety of backgrounds and educational majors.

The GIFT Plan also provides tax-deferred growth of earnings, and withdrawals from the Plan for qualified higher education expenses are currently tax-free.* More information on the GIFT Plan is available at www.thegiftplan.com or by calling (800) 587-7301.

For more information about financial aid programs, including core curriculum, GPA and ACT requirements, as well as links to the state’s 33 colleges and universities, visit the Arkansas Department of Higher Education’s Web site at www.arkansashighered.com or call (800) 54-STUDY.

The GIFT College Investing Plan is a college tuition savings program sponsored by the State of Arkansas. The value of an investment in the GIFT College Investing Plan will vary with market conditions. The GIFT Plan is described in the current Program Description. Please read and consider it carefully before opening an account. Upromise Investments, Inc., Distributor, Member NASD/SIPC .

*Unless extended, federally tax-free treatment of qualified withdrawals will expire after December 31, 2010. Earnings on nonqualified withdrawals are subject to federal income tax and a 10% federal penalty tax, as well as state and local income taxes.

About Upromise Upromise is the country's largest non-governmental service helping families save for college. Membership is free and allows families to automatically save money for college while making everyday purchases at more than 20,000 grocery and drug stores, 14,000 gas stations, 8,000 restaurants, 10,000 hotel locations nationwide, thousands of retail stores and over 350 online shopping sites. Upromise's partners include America Online, Citi®, Coca-Cola®, ExxonMobil Corporation, Kellogg Company, Kimberly-Clark, McDonald's®, SBC Communications, JCPenney.com, LandsEnd.com, sears.com, and hundreds of others. Upromise also makes it easy for families to invest in tax-advantaged college savings plans and to use contributions to pay off student loans. The 529 college savings plans are offered through Upromise Investments, Inc. (member NASD/SIPC). Upromise is headquartered in Needham, Mass. For additional information, visit www.upromise.com or call 781.707.8400.

About The Vanguard Group The Vanguard Group, headquartered in Valley Forge, Pa., is the nation's second-largest mutual fund firm and a leading provider of employer-sponsored retirement plan services. Vanguard is also a leader in the 529 College Savings marketplace, offering investment options in 12 state 529 plans totaling $7.2 billion in assets. Vanguard manages nearly $830 billion in U.S. mutual fund assets, including more than $245 billion in employer-sponsored retirement plans. Vanguard offers 129 funds to U.S. investors and more than 40 additional funds in foreign markets.