Questions tagged [529-plan]

for questions that relate to a 529-plan. A 529 plan is a tax-advantaged investment vehicle in the United States designed to encourage saving for the future higher education expenses of a designated beneficiary.

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Can and should we use all of our 529 and ESA money in one school year?

When our child was a preschooler my wife and I set up 529 and ESA funds. However, that was limited because the public schools in our area are badly overcrowded, somewhat dangerous, and do not provide ...
GreenMatt's user avatar
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My husband became a custodian on our son's 529 plan when my mother-in-law passed . Does the 15 year clock start all over again on IRA Conversion?

My mother-in-law opened an account for our son when he was very young. She died 10 years ago, and the change in custodian resulted in a new account registration. So, although the account looks like it ...
Rebecca Cuff's user avatar
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MESP Tax forms for years with only contributions

I started two 529 funds for my children in the 2023 calendar year and want to claim the contributions from my Michigan State Income tax. But I was looking on the MESP site and can't find any tax ...
sedavidw's user avatar
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Move cash reserves to 529?

Let’s say that I am maxing out my 401(k), IRA, and HSA; I’m putting away $250 a month in a 529 I own with my kid as the beneficiary; and any take-home income left over at the end of the month goes ...
matt.dolfin's user avatar
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Does it make sense to get a 529 plan to convert to Roth IRA in the future?

Given the recent changes on rolling over a 529 plan, could one start a 529 plan and then convert it to a Roth 15 years down the line if they don't use it for any schooling? I haven't considered 529 ...
heretoinfinity's user avatar
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Does changing 529 beneficiary reset 15-year clock for IRA rollover?

I opened a 529 years ago for my child's college. At that time I listed myself as the beneficiary because it was easy and a 529 beneficiary can be readily changed. Now, with the incoming change to ...
Matthew's user avatar
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NYSaves 529 Plan vs Vanguard Fidelity 529 Plans

My partner and I live in NY State and file jointly. I want to start investing into NY States 529 program here : https://www.nysaves.org/ I am planning to invest 10k per year for tax deduction and not ...
money.frictionlesspulley's user avatar
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Can you deduct state income with a non-sponsored 529?

I live in MI and it has a state sponsored 529 program called MESP. However I do most of my money management in Fidelity and would like to keep 529 there as well. I can open a 529 there but it doesn't ...
sedavidw's user avatar
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529 Funds and Scholarship Refunds

I have a unique situation with my college billing: For a handful of semesters at a local community college, I had to pay for my schooling (nothing special there), and I continued to do so like normal ...
Display Name's user avatar
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How strict are MESP 529 spending guidelines

I have consulted the IRS tax literature, MESP guidelines, and spoke with representatives for the MESP, individuals from my school's financial aid department, and have not been able to come up with a ...
avocado811's user avatar
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How to handle PA 529 if the actual rent is more than COA?

My child is going to live off-campus and pay rent more than COA rent suggested by the college. Can I withdraw the COA rent amount from 529 and show the actual rent paid (which is way more) as proof? ...
user65985's user avatar
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Saving receipts for money withdrawn from 529 plan

I am planning to withdraw the full amount of ‘Cost of attendance’ given by school for a semester from 529 plan. Can I withdraw money for expenses towards off-campus room and board for a full semester ...
user65985's user avatar
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Can I withdraw leftover money in PA 529 account because my child received scholarship?

My daughter graduated in 2017 with BS degree. She received scholarship money about $100,000 in 4 years. So I took money from 529 only for room and board and so there is left over money in 529. I ...
user65985's user avatar
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Age requirements for rolling savings bonds into 529 plans

It's my understanding that one can avoid paying taxes on savings bond interest if the money from the bond is put into a 529 college savings plan. My question is about the apparent requirement that the ...
Nick Matteo's user avatar
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Is a New Jersey (United States) resident earning New York state income allowed to deduct New York State 529 contributions via form IT-203?

I am a New Jersey resident that earns New York State income, and so I file form IT-203. I noticed this year something I hadn't before - the New York State 529 website mentions (under Direct Plan tax ...
CSSBurner's user avatar
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If 529 distribution is qualified expense, should I report it in tax return?

I received 1099Q and 1098T. The withdrawal was for tuition. I am not qualified for any education credits. Can I not report this on my tax return?
user65985's user avatar
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529 withdrawal: Does it matter who makes the purchase?

Building on this question where it is made clear that it is better to have the distribution paid to the beneficiary, rather than the parent/guardian... does it matter who makes the original purchase? ...
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What counts as a scholarship for 529 fund purposes?

I understand that when a beneficiary receives a scholarship the holders of a 529 account can withdraw the scholarship amount from a 529 account without incurring the 10% fee. In particular I am ...
Jordan Mandel's user avatar
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106 views

How soon can I use 529 for paying college

I enrolled into college. I'm thinking to enroll into 529 plan to pay my college fees for the coming semester. This is with an intent that I will be able to save tax on the money used for tuition. Is ...
RV.'s user avatar
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Is a DC college savings plan $8,000 tax deduction across all kids or is it per child?

DC College savings plan states the following and I'm wondering if the $8,0000 deduction for married couples filing jointly applies for all children or one child. For example, would a couple with two ...
2q.'s user avatar
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529 college saving plan only affect state tax return but not federal tax return, correct?

I just realized that the 529 plan contribution deadline is the end of the calendar year. So my first-time 529 plan contribution that happened a few days ago should not be counted in the year 2020 tax ...
peterB's user avatar
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Transfer 529 Funds from Child's Account to Pay Parent's Existing Student Loans?

We have been saving a little every month into our daughter's 529 account since she was born. She is now 10 years old, and the account balance is about $25,000. We intend to continue to make regular ...
Martin in Cal's user avatar
7 votes
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What does "not funded by you" mean in Vanguard's college savings planner?

What does the green area called "Not funded by you" represent in this type of college 529 calculator? Source calculator here.
Josh's user avatar
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What tax documents do I need to prove 529 rollover?

I rolled over 529 from one institution to another. The distributing institution issued a 1099-Q. I need a matching document showing that I contributed the funds to the new institution. Does this form ...
tir38's user avatar
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Is there a tax form that reports deductible contributions to a 529 plan?

All 529 plan contributions are not deductible at the Federal level, therefore the IRS doesn't seem to have a form used to report the contributions. However, several states (like mine, Oklahoma) allow ...
Nosjack's user avatar
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5 votes
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Is room and board a qualified expense?

My daughter recently started college, and I'm looking at paying for it out of her 529 account. A significant part of the cost is room and board. The IRS website about qualified educational expenses ...
Peter K.'s user avatar
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Where can I enter my contribution for Maryland College Investment Plan in TurboTax Online?

I'm a Maryland resident who contributed $2500 to each of my two daughters' Maryland College Savings Plans. That should entitle me to a $5000 Maryland state tax deduction. Now I'm trying to do my taxes ...
Saqib Ali's user avatar
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School's tuition insurance charge eligible for 529 reimbursement?

My son's tuition bill includes around $100 for tuition insurance. Can I have this paid directly from the 529 account to the university, or must I pay that separately? Articles I've read researching ...
David Gaertner's user avatar
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197 views

Understanding 529 tax benefits and recapture (Illinois)

I'm a little confused as to how recapture works for 529 plans in Illinois (particularly with respect to playing for private school and possible changes in the state tax code.) Or rather, I want to ...
user105128's user avatar
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Can I benefit from a liquidation event if I use the funds to pay off my spouse's student loans?

I am expecting some liquidity on my NSO (Non-qualified Stock Options) and ISO ( Incentive Stock Options) with current company. I have heard of 529 for college fund. Is this something I could use to ...
perennial_noob's user avatar
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Can I deposit money into a Colorado 529 and withdraw for expenses in the same year?

I'm getting smart to 529 plans way too late, but also wasn't sure if the kid would go to college and I happen to have come into a bit of money. I paid $5K for tuition in September 2020 for the fall ...
Android Newbie's user avatar
6 votes
1 answer
262 views

529 distribution pro-rata with multiple accounts

With multiple Roth IRA accounts, distribution ordering rules treat all accounts as one. Does this rule generally also apply to 529 accounts? That is, if I am the owner on multiple 529 accounts, are ...
arcyqwerty's user avatar
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4 votes
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What is a good vehicle to do ad-hoc savings for kids' college?

My kids are 11 and 14. I've neglected to save any money for college for them, but I want to start now. I live in Maryland. I understand that 529 college savings plans are usually the best way to go. ...
Saqib Ali's user avatar
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2 votes
1 answer
69 views

Choosing a 529 (PA Resident)

I've spent a few hours trying to figure out which state to use for a 529 for my child's college. What I would really like is "What's the best state for me to choose?", but I'll settle for &...
goodguy5's user avatar
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529 withdrawal tax implications

I have a 529 account in Michigan for my children. It is tax free on withdrawals for higher education cost. I recently moved into another state, so I am still debating whether I should keep the ...
fhcat's user avatar
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2 votes
2 answers
141 views

Multiple 529 accounts vs one generic on my name?

First time investing. Have four children 6 and under. I wish to start putting money aside for them to go to college (or other things that might come up, like marriage, etc.). One idea I have: instead ...
rodrigo-silveira's user avatar
2 votes
1 answer
104 views

Must 529 withdrawals be made the same year as student loan payments to avoid taxes and/or penalties?

Background The tax law definition for Qualified Higher Education Expenses (QHEE) was amended (signed into law in December of 2019) to include student loan payments (to a maximum of $10,000). 529 ...
Dale's user avatar
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2 votes
0 answers
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Contributing to 529 when living in one state but working in another

I live in NY, but I work in CT. Both states allow you to deduct up to $5000 of 529 contributions to their plan. Based on what I've read, I need to pay taxes to both states, and then I get the amount ...
Daniel M.'s user avatar
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1 vote
1 answer
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What are the penalties for closing a 529 plan account?

At the end of 2019 I opened and funded a 529 plan account. Now in 2020, not having yet filed my federal or state tax return for 2019, I find that this was a poor decision. The account has earned a ...
Jean-Paul Calderone's user avatar
1 vote
1 answer
292 views

Can I use a 529 plan to pay a refinanced student loan?

As pointed out in another question, in the U.S. we can now use a Qualified Tuition Program (QTP, e.g. a Section 529 Plan) to pay student loans as a qualified education expense - provided your state ...
kuloch's user avatar
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5 votes
1 answer
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Can I use a 529 plan to pay student loans and claim both the state 529 deduction and the federal student loan interest deduction?

At first blush, this sounds like it might be double-dipping. But let's take a look at the new IRS rules. As pointed out in another question, in the U.S. we can now use a Qualified Tuition Program (...
kuloch's user avatar
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14 votes
2 answers
4k views

Can I open a 529 retroactively to pay my student loans?

At the end of the year 2019, congress passed the SECURE Act. This act does many things relating to retirement accounts, but Section 302 specifically relates to 529 account expansions. These changes ...
Erin B's user avatar
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11 votes
2 answers
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529 vs IRA for kids education and future scholarship

I have young kids going in preschool. I have already started investing in 529. However, many of my friends mention that if I invest single penny in 529 plan for my kids, they will miss out on any ...
msgboardpana's user avatar
5 votes
4 answers
5k views

529 (college saving) account for multiple kids

I have a 529 account for my 3-year-old. We just discovered we're expecting another baby. Is it better to open a new 529 for the new baby or just keep contributing to one and then split it later on?
Paul Erdos's user avatar
4 votes
1 answer
174 views

Are contributions to a non-dependent's 529 account in MN tax deductible?

(Minnesota) If I contribute to the 529 account of a friend or relative who is not my dependent, can I still claim the 529 tax deduction or tax credit?
T.D. Smith's user avatar
2 votes
2 answers
956 views

Benefits to separate 529 plans for each parent

Are there any benefits to having separate 529 plans for the same child but for each parent? I am curious since only one parent can be the owner of each account. It's similar to Do I need to start a ...
Ryan Gates's user avatar
1 vote
1 answer
93 views

new york state 529 k-12

https://www.nysaves.org/home/fe.html Under New York State law, distributions for K-12 tuition expenses are considered nonqualified withdrawals and will require the recapture of any New York ...
andersonbd1's user avatar
1 vote
1 answer
579 views

Colorado 529 withdrawal income tax recapture and AOTC

In Colorado contributions to the state 529 plan are deductible from State income taxes. These income taxes are recaptured if a non qualified withdrawal from the plan is made. My husband (the ...
Vality's user avatar
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2 votes
2 answers
246 views

Are non-qualified withdrawals from a 529 plan penalized on the original contributions?

My understanding is that early (nonqualified) withdrawals from a 529 plan are penalized at 10%, plus taxed over any capital gains. Does the 10% penalty apply to capital/investment gains only, or to ...
Phillip's user avatar
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2 answers
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529 Plan from Fidelity

My son is in 8th grade now. I want to start putting money in a 529. I live in NC and he will almost certainly go to Uni here. In looking at options, contribution to the NC 529 plan don't have any ...
ChuckLeviton's user avatar