1. 529 Plans: Introduction
  2. 529 Plans: Types of Plans
  3. 529 Plans: Eligibility
  4. 529 Plans: Contributions
  5. 529 Plans: Distributions
  6. 529 Plans: Conclusion

With fewer savings restrictions than a Coverdell education savings account (ESA), the 529 plan is an excellent way to save for education expenses.

Let's recap:

  • Using a 529 plan allows for the prepayment of qualified higher-education expenses at eligible educational institutions.
  • There are no income restrictions for individuals who want to contribute to a 529 plan. However, because contributions cannot be more than the amount necessary to provide for the qualified higher-education expenses of the beneficiary, individuals should take care not to contribute too much to the plan.
  • Starting in 2018, an individual may contribute up to $15,000 each year to a designated beneficiary's 529 plan without incurring federal gift tax, provided that the individual makes no additional gifts to that designated beneficiary for the year.
  • The distribution from the 529 plan may be used for qualified expenses, including:
    • tuition and fees
    • books, supplies and equipment
    • academic tutoring
    • room and board
    • uniforms
    • transportation

Materials on each State's 529 plan are available from the College Savings Plans Network's (CSPN) website at www.collegesavings.org.


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