Save for college, save on taxes with my529

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November 26, 2018

Qualify for tax credits or deductions with contributions by year’s end

(Salt Lake City) Utah taxpayers can save on their 2018 taxes when they invest for college with my529, Utah’s official nonprofit 529 educational savings plan.

my529 account owners can claim a 5 percent Utah state income tax credit or deduction for 2018 tax year contributions for each qualified beneficiary. Contributions are eligible for tax benefits up to the allowed maximum (see table below). For the account owner to qualify for state tax benefits, the beneficiary must be younger than 19 when he or she was designated on the account.

Account owners with more than one beneficiary can total the credits for each beneficiary. For example, if a Utah account owner files “single” on their Utah state income taxes, and contributes $1,960 to a my529 account for each of three beneficiaries, they can claim the 5 percent tax credit of $98 for all three beneficiaries, for a total tax savings of $294.

A corporation may deduct up to $1,960 per beneficiary from its income.

In addition, if a friend or family member contributes to an account, the account owner can include that contribution in their total tax credit. Friends or family can easily make contributions through the my529 Gift Program.

More Tax Benefits

In addition to the Utah state income tax credit, earnings on my529 accounts grow tax-deferred. Withdrawals are free from federal and Utah state income taxes when used for qualified higher education expenses.

Qualified expenses include tuition and fees; required books, supplies, and equipment; computers, related equipment, services, and internet access; and certain room and board costs. You can use funds at technical schools, colleges, and universities in the United States and abroad that participate in federal financial aid programs for students. In addition, you can use my529 funds for K-12 tuition expenses of up to $10,000 per beneficiary per year (from all qualified tuition programs) at public, private, and religious schools.

“my529’s Utah account owners can earn a 5 percent state tax credit per qualified beneficiary, as well as the federal tax benefits available for 529 plans,” said Lynne Ward, executive director of my529. “This annual tax break helps Utah families as they work toward their education goals.”

my529 2018 Year-End Deadlines

Submit account transactions online, by mail, or drop them off at the my529 office. Forms are available at my529.org. my529 will record contributions and other transactions for the 2018 tax year by the following deadlines:

About my529

my529, formerly named the Utah Educational Savings Plan, is highly ranked by Morningstar Inc., and recognized by Kiplinger’s Personal Finance magazine for its low fees and industry innovations such as its customized allocation investment options.

Accounts are free to open, and my529 requires no minimum deposit or account balance. my529’s user-friendly website, my529.org, makes it easy to open, manage, and contribute to an account online.

To learn more about the my529, visit my529.org, call my529 toll-free at 800.418.2551, or send an email to info@my529.org.

 

Important Legal Notice

Investing is an important decision. Read the Program Description in its entirety for more information and consider all investment objectives, risks, charges, and expenses before investing. For a copy of the Program Description, call 800.418.2551 or visit my529.org.

Investments in my529 are not insured or guaranteed by my529, the Utah State Board of Regents, the Utah Higher Education Assistance Authority or any other state or federal agency. Your investment could lose value. However, Federal Deposit Insurance Corporation (FDIC) insurance is provided for the FDIC-insured accounts. Please read the Program Description to learn about the FDIC-insured accounts.

The state in which you or your beneficiary pays taxes or lives may offer a 529 plan that provides state tax or other benefits, such as financial aid, scholarship funds, and protection from creditors, not otherwise available to you by investing in my529. You should consider such benefits, if any, before investing in my529.

my529 does not provide legal, financial, investment, or tax advice, and the information provided in this document does not contain legal, financial, investment, or tax advice and cannot be construed as such or relied upon for those purposes. You should consult your own tax or legal advisor to determine the effect of federal and state tax laws on your particular situation.

A Morningstar Analyst Rating™ for a 529 college savings plan is not a credit or risk rating. Analyst ratings are subjective in nature and should not be used as the sole basis for investment decisions. Morningstar does not represent its analyst ratings to be guarantees. Please visit Morningstar.com for more information about the analyst ratings, as well as other Morningstar ratings and fund ratings.