529 college savings plan - FAQ?
What is a 529 plan? The 529 Plan was created under section 529 of the Internal Revenue Code (IRC) and sponsored by individual states, 529 plans are tax-advantaged education savings vehicles. Beginning in 2002, changes to the Internal Revenue Code have rendered these plans superior to many other savings vehicles in tax treatment of withdrawals used for qualified education expenses. However, under a "sunset provision", the tax exemption for earnings on qualified withdrawals is scheduled to expire on December 31, 2010 unless extended by Congress.
Who is eligible to open a 529 plan account? Any legal US resident can open a 529 Plan account, regardless of income or state of residency.
Who can be the beneficiary of my 529 plan account? There are no age or family relationship limits on 529 plan beneficiaries. Any legal US resident can be a beneficiary of a Future Scholar 529 College Savings Plan account. You can even open an account with yourself as the beneficiary, to help with your own higher educational expenses.
Can a beneficiary have more than one 529 Plan account? Yes. Provided that the combined total of all accounts for the same beneficiary in a given state does not exceed that state's maximum contribution limit, a beneficiary can have more than one account under different account owners.
Can I change my plan account's beneficiary? Yes, with certain limitations. A change in beneficiaries is permitted and can be done without federal income tax or penalty provided that the new beneficiary is a qualified member of the current beneficiary's extended family.
More FAQs