If you're like most Americans, you don't even know what it is.
All the more reason to keep reading.
That's because, with the new tax law, Republicans have made important changes to 529 plans that will affect millions of taxpayers, not just the ones saving for college. Before that news, though, a quick primer.
A 529 plan lets families save money for college. Think of it as a love child, born in the mid '90s to your federal and state governments. And they named it, in a flash of creativity, after its relevant section in the Internal Revenue Code.
States generally manage the plans, while the Feds let the money grow long-term, tax-free. Thirty-three states also try to encourage savers with a little short-term reward (or not so little, in some cases): When families in those states make a contribution, they get a deduction or credit on their state income taxes, too.
