Michigan parents and grandparents who work with a financial professional will have yet another option when it comes to saving for college. And this new option could include a tax break for state income taxes.

As soon as Monday, Michigan is expected to roll out a new 529 plan, called the MI 529 Advisor Plan, that will be available only through licensed brokers. The new Web site for the plan -- http://www.MI529advisor.com -- is expected to be running once the official announcement is made.

The state's existing 529 plan -- the Michigan Education Savings Program -- will continue to be available. The existing plan is not sold through brokers but is bought directly by savers. See http://www.misaves.com .

Do investors really need yet another 529 plan when there are at least 85 such plans nationwide already out there -- not including any prepaid tuition plans, which technically are 529 plans?

Well, the answer is yes if Michigan continues to offer generous tax breaks for Michigan residents who invest in a Michigan plan.

Regulators, such as the Financial Industry Regulatory Authority, have long expressed concern that investors can be persuaded to put money in a 529 college-savings plan that offers them no in-state tax breaks. A couple could receive a call from a broker who recommends a 529 plan in another state.

For example, Michigan families who worked with a broker -- say at Merrill Lynch or elsewhere -- would not qualify for a Michigan income tax deduction if they put money into 529 plans outside of Michigan, such as Maine's NextGen College Investing Plan.

Say the family might invest $5,000. But because the plan is in another state, the family would lose out on Michigan's tax incentives for investing in the Michigan plan. See www.finra.org for information and alerts on 529 college savings plans, as well as a calculator to review costs.

For the full article, see Susan Tompor, "State to see new college saving plan", Detroit Free Press, November 29, 2009.