CollegeChoice 529 Direct Savings Plan FAQs
Who is eligible to open a CollegeChoice 529 Direct Savings Plan account?
- Enrollment is open to ONLY Indiana Taxpayers.
To claim a tax credit for 2019, I need to contribute money to my CollegeChoice 529 account by December 31, 2019. How soon can I use the funds?
- IMPORTANT: You can choose to withdraw the funds as soon as seven business days after contributing money to the account, or you can allow the funds to grow for years.
Either way, you can still claim the tax credit for 2019 equal to 20% of your contributions up to a maximum credit of $1,000.
Example: Invest $4,000 on December 1, 2019 – withdraw money as early as December 10, 2019 (seven business days) and lower your Indiana tax or increase your refund by $800 (20% of $4,000) when you file your 2019 Indiana tax return in 2020.
- Money withdrawn can be paid to you (the account holder), the student or directly to the school.
Can I use a CollegeChoice 529 account for schools other than colleges?
• The CollegeChoice 529 funds can also be used to pay tuition to K-12 schools in Indiana.
Can I use my CollegeChoice 529 funds for schools outside the state of Indiana?
• CollegeChoice 529 funds can be used for qualified educational expenses for colleges and vocational schools around the world but K-12 schools must be located in the state of Indiana.
What are the tax benefits of opening a CollegeChoice 529 account?
• Your funds grow tax-deferred and distributions are free from federal and Indiana state taxes if used for qualified educational expenses.
How much are the annual investment account fees?
• There are no annual account maintenance fees for Indiana residents.
What are considered qualified educational expenses?
• K-12 tuition up to $10,000 per year for schools in Indiana
• College and vocational school tuitions worldwide
• College expenses such as: room and board, computers, books, and other supplies
How much money do I need to open a CollegeChoice 529 account?
• You can open an account for as little as $10.00 and make additional investments of $10.00 or more.
Who controls my account?
• You control your account.
• You determine when to withdraw the funds – as soon as seven business days after your contribution.
• You can open an account to benefit any relative you choose, even yourself.
• The account stays in your name.
• You decide which qualified educational costs to use the funds for.
• You receive detailed quarterly statements and have direct online access to your account 24/7.
Do I have flexible contribution and investment options?
• You choose one or more investment options based upon your risk tolerance – an FDIC insured Savings Account, Vanguard® Bond Index Portfolio, Stable Value Portfolio, US Equity Index Portfolio, Dodge & Cox Funds® International Portfolio, Scout Investments® Active Bond Portfolio, or Western Asset® Inflation-Protected Portfolio. You can change the direction of your contributions. Federal law permits you to move the assets in your CollegeChoice 529 account to a different mix of investment options twice per calendar year.
Are there ways to grow the funds other than depositing them myself?
• Friends and family members can also contribute funds to your account through Ugift®. Just opt-in through your online account access area and give them the unique Ugift code specific to your account.
• You can also grow your contributions faster by joining Upromise®. Simply join for free and then do what you normally do – buy groceries, shop online, book travel, dine at restaurants, and more. A percentage of your eligible purchases will be deposited into your Upromise account. Then just link your Upromise account with your CollegeChoice 529 account and the funds will be automatically transferred.
• Earn even more with a Upromise Mastercard.
Can I open an account for an unborn baby?
• You can open an account to benefit yourself or another relative and change the recipient to the baby once he or she is born and has a Social Security Number.
CollegeChoice 529 is administered by the Indiana Education Savings Authority (Authority). ABD, the Program Manager, and its affiliates, have overall responsibility for the day-to-day operations, including investment advisory, recordkeeping and administrative services, and marketing. CollegeChoice 529's Portfolios invest in: (i) mutual funds; or (ii) an FDIC-insured omnibus savings account held in trust by the Authority at Sallie Mae Bank. Except for the Savings Portfolio, investments in CollegeChoice 529 are not insured by the FDIC. Units of the Portfolios are municipal securities and the value of units will vary with market conditions.
Investment returns will vary depending upon the performance of the Portfolios you choose. Except to the extent of FDIC insurance available for the Savings Portfolio, depending on market conditions, you could lose all or a portion of your money by investing in CollegeChoice 529. Account Owners assume all investment risks as well as responsibility for any federal and state tax consequences.
Upromise is an optional service offered by Upromise, Inc., that is separate from the CollegeChoice 529 Direct Savings Plan, and is not affiliated with the State of Indiana. Terms and conditions apply to the Upromise service. Participating companies, contribution levels, and terms and conditions are subject to change at any time without notice. Transfers from Upromise to a CollegeChoice 529 Direct Savings account are subject to a $25 minimum.
Upromise and the Upromise logo are registered service marks of Upromise, Inc. Ugift is a registered service mark of ABD.