Can I continue to contribute to my daughter's 529 plan?
I had made regular contributions to my daughter's 529 plan and used part of the fund for her RN degree. She is now 23 years old and is returning to school for her BSN. Is there an age restriction or can I start regular contributions again and use the 529 for her next degree?
No age restrictions, so you can certainly add to the 529 plan if you want.
However, I am not sure you stand to benefit much from its primary feature -- tax-deferred growth. Mainly because your contribution is going in and likely coming right back out to pay her BSN tuition. If you need the state income tax deduction, then maybe a 529 is worth further consideration. I also would advise you to be very conservative with how the money is invested. The reason I throw caution is you lose flexibility in terms of how that money can be used once you add it to 529 plan. Any gains withdrawn for non-school purposes are taxed at ordinary income rates and subject to a 10% IRS penalty. Just want to make sure that whatever you do that it is a well-informed decision.
If she is still listed as the beneficiary on the 529 plan, you can use the account to pay her qualified education expenses. There is no age restriction. You can make additional contributions to the plan and if you don’t use all of it for her education, you can change the beneficiary to another family member.
At this time, the IRS has not designated an age limit on contributions to a 529 plan. The distributions must be used for "qualifying higher educational expenses", and you may wish to consider the gift tax implications and impacts to your estate planning when deciding how much to contribute.