A plan operated by a state or educational institution, with tax advantages and potentially other incentives to make it easier to save for college and other post-secondary training, or for tuition in connection with enrollment or attendance at an elementary or secondary public, private, or religious school for a designated beneficiary, such as a child or grandchild.

Earnings are not subject to federal tax and generally not subject to state tax when used for the qualified education expenses of the designated beneficiary, such as tuition, fees, books, as well as room and board at an eligible education institution and tuition at elementary or secondary schools. Contributions to a 529 plan, however, are not deductible.

Congress created them in 1996 and they are named after section 529 of the Internal Revenue code. “Qualified tuition program” is the legal name.

Generally, yes. You can set one up and name anyone as a beneficiary — a relative, a friend, even yourself. There are no income restrictions on either you, as the contributor, or the beneficiary. There is also no limit to the number of plans you set up.(Source: IRS.gov)

Parents and grandparents who are non-U.S. citizens may be able to open a 529 college savings plan if they are U.S. taxpayers. Most 529 plans require the account owner to be a U.S. citizen or a resident alien with a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN).

Parents and grandparents who are non-U.S. citizens may be able to open a 529 college savings plan if they are U.S. taxpayers. Most 529 plans require the account owner to be a U.S. citizen or a resident alien with a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN).

Non-U.S. citizens living outside the U.S. may still contribute to a child’s 529 plan that someone else owns.

Grandparent-owned 529 account assets and withdrawals for qualified education expenses do not impact financial aid awards under new FAFSA rules. (Source: Savingforcollege.com)

For more information, please contact your 529 account representative.

Most 529 college savings plans allow you to open an account with a small amount. Some account holders sign up for an automatic investing plan, with the 529 contributions coming directly from a bank account. Some employers allow account holders to make 529 contributions automatically as a payroll deduction. Check if your employer offers that benefit. (Source: schwab.com)

Yes. Contributions can not exceed the amount necessary to provide for the qualified education expenses of the beneficiary. If you contribute to a 529 plan, however, be aware that there may be gift tax consequences if your contributions, plus any other gifts, to a particular beneficiary exceed $19,000 during the year. For information on a special rule that applies to contributions to 529 plans, see the instructions for Form 709 PDF, United States Gift (and Generation-Skipping Transfer) Tax Return.

No. Your state’s 529 plan may offer incentives to win your business. But the market is competitive and you may find another plan you like more. Be sure to compare the various features of different plans.

A designated beneficiary is usually the student or future student for whom the plan is intended to provide benefits. The beneficiary is generally not limited to attending schools in the state that sponsors their 529 plan. But to be sure, check with a plan before setting up an account.