You had a plan to save on your 2023 holiday shopping this year. You took advantage of the Black Friday deals, supported your neighborhood shops on Small Business Saturday, and searched the internet for the best steals on Cyber Monday.
Which brings us to today, Giving Tuesday, which marks the start of the charity giving season which lasts through all the holiday celebrations. Giving Tuesday emphasizes meaningful offerings of your time, talents, and financial support, for the benefit of others.
So why not consider taking all those shopping savings and make a 529 contribution with them? Giving to a loved ones’ Ohio 529 higher education savings account — or starting an Ohio Direct 529 account — — is truly a gift that has value and significance. And it is one gift that your loved one can never outgrow.
What is a 529 plan?
529 plan is a higher education savings account that grows with many tax benefits, starting with tax-free earnings. This means all investment growth is yours to use for education after high school. Withdrawals from a 529 plan that pay for qualified higher education expenses are also tax-free.
For 34 years, Ohio’s 529 Plan has provided families in and out of Ohio flexible options and educational resources to invest for education expenses after high school.
Funds in Ohio’s 529 Plan can be used tax-free for all types of qualified higher education institutions nationwide, including a typical four-year college or university, community college, technical or trade school, a certificate program or apprenticeship. If the institution accepts federal financial aid, you can use the 529 plan there. For apprenticeships, the program must be registered with the Secretary of Labor’s National Apprenticeships Act. Check the U.S. Labor Department’s search tool to confirm that a program is registered, and therefore, eligible for a 529 withdrawal.
The uses for 529 funds are very flexible. They may be used to pay qualified higher education expenses that are required to attend an institution. The costs include tuition, fees, room and board, books, computers, class supplies, certain apprenticeship costs, mandatory fees, and more. Families can even use up to $10,000 for student loan repayment for the beneficiary of the 529 account. You can also use your 529 plan to pay K-12 tuition up to $10,000 per student, per year, for enrollment at public, private, or religious elementary or secondary school. Starting January 2024, you can rollover remaining 529 funds to a Roth IRA, provided certain requirements are met.
There is no fee to open an Ohio 529 account. Contributions start as low as $25 and can be increased to any amount, at any time. You can set up an automatic monthly contribution to be deposited into the 529 account to grow your loved one’s college savings.
State tax deduction for Ohioans giving to Ohio’s 529 Plan
If you, or any gift giver, are an Ohio resident, then you could both be eligible to deduct up to $4,000 of your Ohio’s 529 Plan contributions per beneficiary, per year, from your state taxable income. However, you can contribute even more! Contributions over $4,000 per beneficiary, per year, can be carried forward to future tax years until you have deducted all your contributions from your state taxable income. To have your contributions included for the 2023 State Of Ohio income tax deduction, contributions must be received in good order by CollegeAdvantage before 4 p.m. EST Friday, Dec. 29.
Saving made easy with READYSAVE 529
The READYSAVE 529 app gives you quick and simple access to your college savings account to check account information, track account growth, and make both one-time and recurring contributions for as little as $25 from the bank account on file from your cell phone. You can download the READYSAVE 529 app now from the Apple and Google Play app stores. Once you install the app, select Ohio’s 529 Plan from the list and log in with the same username and password you use to access your account online.
Others can give to Ohio’s 529 Plan
If you already have a CollegeAdvantage Direct Plan account, you can provide other family members an Ugift code for your child’s account. This code permits others to make online gift contributions to your CollegeAdvantage Direct 529 Plan without needing the 529 account number. With the READYSAVE 529 app, you can send an invitation to your family and friends to contribute to your child’s higher education via Ugift — just in time for the holidays and end-of-year giving.
If a loved one who is an Ohio resident wants to give a gift of higher education to your Ohio 529 account through Ugift, their contribution must be received in good order before 4 p.m. EST Tuesday, Dec. 20 to include in their 2023 State Of Ohio income tax deduction.
To learn more about gifting options with Ohio’s 529 Plan and order holiday and special occasion greeting cards, visit 529 Gift Central.
For more than 34 years, Ohio’s 529 Plan, CollegeAdvantage, has been helping families across the nation save for their children’s education after high school. Ohio’s 529 Plan covers qualified costs at any four-year college or university, two-year community college, trade or vocational school, apprenticeship approved by the U.S. Labor Department, or certificate program nationwide that accepts federal financial aid. Start, add, or give a gift with as little as $25 at CollegeAdvantage.
This article was originally posted in November 2020 and has been updated to reflect current information for 2023.
