You don't have to live in Montana, Arizona or Indiana to take advantage of the college savings options within these states.
Any U.S. taxpayer, regardless of income, may establish a tax-favored 529 college savings account for anyone - including themselves,
to help pay qualified higher education expenses.
- There are no in-state use restrictions.
- Use the proceeds at any eligible college, university, proprietary or vocational school worldwide.
Higher education expenses include tuition, fees, textbooks, supplies and equipment required to attend an eligible institution.
If the student’s enrollment qualifies for at least half-time, room and board expenses are also eligible up to a specified level.
Eligible institutions include virtually all accredited, public, nonprofit and proprietary postsecondary educational institutions.
Enrolling is easy with multiple deposit options! You can enroll online or print and mail an enrollment form.
Open an account for as little as $250. And/or sign up for direct deposit through your employer for as little as $25 per pay
period or automatic deposits from your bank account for as little as $25 per month.
Federal 529 Plan Tax Benefits
- Earnings grow tax-free.
- Distributions to pay qualified education expenses are tax-free.
- Anyone can participate and there are no income limitations.
- Participants also benefit through tax-free gifting. Account owners can make annual gifts of up to
$13,000 single and $26,000 joint to a designated beneficiary for all accounts without incurring federal gift tax.
For contributions over the limit, you may treat the money (up to $65,000 single and $130,000 joint) as having been made
ratably over a five-year period.
- At any time you may prepay as much college and graduate school as you'd like up to $350,000 - the current maximum
contribution limit.
- Assets in a 529 account are not treated as part of the federal taxable estate of the account owner who is
not a designated beneficiary.
- U.S. Savings Bond owners generally may redeem bonds purchased after 1989 tax-free and deposit the proceeds in a
529 plan. IRS restrictions apply. Please see the IRS Tax Benefits for Education for current income limitations or
call 1.800.888.2723 for more information.
- If the child does not go to college you can change the beneficiary penalty free. To avoid taxes and penalties,
your new beneficiary must be a member of the family of your original beneficiary. Certain restrictions apply. Please
consult your tax advisor and the Plan Disclosure for more detailed information regarding a change in beneficiary.
State 529 Plan Tax Benefits:
Arizona Residents
Indiana Residents
Montana Residents
Other State 529 Plan Tax Benefits
In addition to federal tax benefits, if you are a resident of a state listed below, you may be eligible for a state income tax deduction based on plan contributions.
- Pennsylvania: For individuals subject to Pennsylvania income tax, contributions made to any 529 plan, including those offered by
College Savings Bank, may be deducted from taxable income on the taxpayer’s annual personal income tax return.
The maximum annual amount that may be deducted is currently $12,000 per beneficiary per taxpayer. The deduction
cannot result in the taxable income being less than zero. The state law also provides that the earnings portion of
any qualified withdrawal is exempt from Pennsylvania income tax.
- Maine: For individuals subject to Maine income tax, receive up to a $250 tax deduction per beneficiary based on contributions to any 529 plan, including those offered by College Savings Bank. Maine taxpayers with incomes of $100,000 or less if a single filer and $200,000 or less for returns married joint filers or heads of household are eligible for a tax deduction on the contributions made in a calendar year.
- Kansas: For individuals subject to Kansas income tax, any contributor may deduct up to $3,000 for single filers and $6,000 for joint filers per beneficiary for contributions to any state sponsored 529 plan including those offered by College Savings Bank.
- Missouri: For individuals subject to Missouri income tax, contributions to any 529 plan, including those offered by College Savings Bank, of up to $8,000 per year ($16,000 per year for a married couple filing jointly) are deductible in computing Missouri taxable income. Only contributions made by the account owner are deductible, except for spouses filing a joint return. Rollover contributions are not deductible. Contribution deadline is December 31 postmark.
Please note:Before investing in any 529 plan, you should consider the benefits of your home state's 529 plan. It may provide taxpayers with state tax and other benefits that are only available through your home state's 529 plan. You should also consult your financial, tax, or other advisor to learn how state-based benefits (or limitations) would apply to your specific circumstances. You also may wish to contact your home state's 529 plan[s], or any other 529 college savings plan, to learn more about those plans' features, benefits and limitations. Keep in mind that state-based benefits should be one of many appropriately weighted factors to be considered when making an investment decision.