Alabama Legislature Funds Tax Break For College Savings

MONTGOMERY, Ala. (AP) -- The state Legislature is providing a tax break to Alabama parents who save for their children's college expenses. 

The Legislature passed a bill May 1 to provide a state income tax deduction of up to $5,000 per year for contributions to either of Alabama's two state-sponsored college savings plans. But the bill provided that it wouldn't take effect unless another bill passed to pay for the tax break.

The Senate voted 31-1 Monday to give final approval to that companion bill. It requires out-of-state residents selling property in Alabama to have income taxes withheld at the time of the sale.

State Treasurer Kay Ivey pushed both bills, and Gov. Bob Riley has said he will sign them into law.