Benefits and Features

Named after the Section of the Internal Revenue Code that created them, 529 Plans are designed specifically to help families like yours save for a child's future education expenses.

 

Characteristics of 529 College Savings Plans

  • Most 529 plans are sponsored by a State; in fact, many States offer tax incentives for investing in their 529 Plan.  For instance, the MI 529 Advisor Plan offers residents of the State of Michigan the ability to take advantage of a State tax deduction for contributions to the MI 529 Advisor Plan.1 The State of Michigan offers three 529 Plans that offer a Michigan Tax Deduction: Michigan Education Trust (MET prepaid plan), Michigan Education Savings Program (MESP Direct Program) and MI 529 Advisor Plan.
  • You can generally enroll in any 529 plan regardless of where you or the beneficiary (student) reside in the United States.2
  • Your Designated Beneficiary (student) can attend any eligible school in the country and even some schools abroad.
  • There are a variety of Tax Advantages for investing in a 529 Plan.  Some of these tax advantages include Tax-deferred growth, state tax advantages, and gift tax benefits.
  • Assets can be withdrawn tax-free when used for qualified higher education expenses. In general, tuition, room and board, books, equipment and fees necessary to attend an institution of higher education are considered qualified higher education expenses.3

 

Click on the following links below to learn more about 529 Plans:

Tax Advantages of 529 Plans

The growing value of a higher education

Estate Planning and Gifting Benefits of 529 Plans

Useful Links

 

1 Before investing, you should consider whether your or the beneficiary's home state offers any state tax or other benefits that are only available for investments in such state's qualified tuition program. Arizona, Kansas, Maine, Missouri, and Pennsylvania residents may invest in ANY 529 plan and take advantage of their State’s income tax deduction.

2 Make sure you check with the 529 plan provider before enrolling. Some State’s 529 Plans have residency requirements.

3 If you use the money for any other purpose, including paying for costs associated with a non-accredited institution, you will not qualify for favorable tax treatment, and the earnings portion of your withdrawal for such purpose will be subject to applicable federal and state income tax and an additional 10% federal tax.

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