529 Savings Plan:

Tax-deferral can have a dramatic impact on the growth of an investment. With a state-sponsored 529 College Savings Plan, an individual’s contributions can grow tax-deferred (some states allow contributions to be partially or completely deductible) and distributed income tax-free as long as distributions are used for qualified education expenses. These expenses include: tuition, fees, room and board, as well as others at higher education institutions.

There is no set limit on contributions, however, some states tend to limit contributions once the plan assets have reached a defined maximum (typically $200,000 - $250,000). Under a special election, you may make contributions of up to $70,000 per beneficiary in a single year without triggering a federal gift tax by accelerating five years' worth of contributions (gifts) as of 2013. Married couples may contribute $140,000 per beneficiary in a single year.*

Assets are professionally managed by fund managers selected by the state. Participants can choose from two to almost 30 mutual fund-type investments. Control of the account remains with the contributor regardless of the age of the beneficiary.

* A $70,000 gift is viewed as an accelerated gift over five years. Any other gifts to the same beneficiary by the contributor within five years may result in a federal gift-tax liability. If the contributor dies within the five-year period, a prorated portion of the contribution may be included in his or her taxable estate for federal estate tax purposes.

Savings and Assumptions

These series of online calculators are for educational purposes only and their accuracy is not guaranteed. The Utah Higher Education Assistance Authority (UHEAA) does not guarantee the accuracy of any information available through these online resources, and is not responsible for any errors, omissions, or misrepresentations.

These calculators do not have any relationship to or impact on any of your student loans. Information such as interest rates are subject to change at any time and without notice and may impact results. All information such as interest rates, payments, etc. are estimates and should be used for general understanding and comparison only. UHEAA does not guarantee any of the information obtained from these calculators.