How Much You Can Contribute
You could also make a lump sum contribution up to $80,000 into a 529 plan and treat it as if the contributions were spread over a 5 year period ($16,000 per year). You would not have to file IRS Form 709 for this, but you would not be eligible to contribute to a 529 plan for that beneficiary for 5 years. This could be a good estate planning strategy for anyone who wants to give more than the current $16,000 limit without affecting his or her lifetime estate and gift tax exemption.
Federal and State Tax Deduction on Contributions
Federal and State Taxation on Distributions
You Can Invest in any State’s 529 Plan and Attend any College or University
Money Can Be Used for Primary and Secondary Education
Pay for Certain Business Expenses
Will You Lose Money in the 529 Plan if your Child Doesn’t go to College?
Tax Penalty Could be Waived on Non-Qualified Distributions
- Your child receives a scholarship, grant, veteran’s educational assistance or employer educational assistance. You could withdraw money from the 529 plan up to the dollar amount of the award received.
- You withdraw money from the 529 plan up to the cost of the education at a military academy
- Your child unfortunately died or became disabled.
Grandparent 529 Plans do not Affect Financial Aid Anymore
In the simplified version of the FASFA Form, you do not need to report cash received from a grandparent-owned 529 plan. Therefore grandparent-owned 529 plans will not affect student financial aid.