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I am a firm believer in the power of saving in a 529 plan as my family has personally experienced its benefits. My husband and I saved in 529 plans for our two children’s education and career training after high school. With the help of our extended family, they both graduated from their respective colleges DEBT FREE! And now, I am saving for my two wonderful grandchildren for their future education.

As we celebrate May 29 as 529 Day, I want to share the many reasons why my husband and I chose to save in a 529 account.

529 tax benefits

All earnings in a 529 plan are tax-free, so all investment growth is yours to use for qualified higher education expenses. Compound interest—the interest earned on contributions, earnings, and interest already accumulated in the 529 account—is included in your tax-free earnings.

529 plan withdrawals for qualified higher education expenses are also tax-free at schools that accept federal financial aid. These costs include tuition; room and board when the beneficiary is enrolled at least half-time; mandatory fees; computer equipment and related technology as well as internet services; books, supplies and equipment related to enrollment and classes; and certain expenses for a special-needs student. Room and board costs can also include rent for off-campus housing—apartments, rental homes, and Greek fraternities and sororities’ houses—and groceries (non-taxable items only), provided these costs are equal or less than the school’s room and board allowances. 529 plans can also pay for fees, textbooks, supplies, and equipment, including required trade tools for registered apprenticeships.

Ohio residents who contribute to an Ohio 529 plan, can deduct up to $4,000 per year, per beneficiary, off their state income taxes with unlimited carry forward. So, if you contribute more than $4,000 in one year, you can continue to subtract $4,000 per year, per beneficiary, from your State of Ohio taxable income until all the 529 contributions are deducted.

Use at many kinds of schools!

529 plans can be used for your child's education after high school – whether for a two-year, four-year, graduate degree, certificate programs, registered apprenticeships programs, or any other post-secondary credential. This list includes community colleges and technical schools, vocational or trade schools, graduate schools, and even some study-abroad programs. If the school has a Federal School Code with the Federal Student Aid, an office of the U.S. Department of Education, then you can pay for qualified costs there with a tax-free 529 withdrawal.

Others can help save

As the adage says, “It takes a village to raise a child.” When loved ones asked us for gift ideas for our children, we asked for contributions to their 529 accounts for their future. In Ohio contributions to a 529 plan start at $25. Ohio 529 also offers Ugift, which allows trusted family members and friends to make online gift contributions directly to your children’s 529 accounts without needing the actual account number. After logging in to your Ohio Direct 529 Plan, you can set up an Ugift code to send to your loved ones who would like to give the gift of a higher education. With the Ugift code, friends and family can visit Ugift529.com to make their electronic contribution securely from their bank account. It’s that easy.

529 flexibility

Not only can you use your 529 account for post-secondary education expenses, but you can also use it for K-12 tuition at a public, private, or parochial elementary or secondary school. This means your savings can cover many costs for elementary, secondary, and post-secondary education. The 529 withdrawal limit is $10,000 per year to pay for K-12 tuition. Consult your qualified tax advisor for specific information.

Families can also pay for a student loan that qualifies for the federal student loan income tax deduction with a 529 distribution. There is a $10,000 lifetime limit for the beneficiary of a 529 account. Another $10,000 can repay the qualified student loans of the beneficiary’s siblings.

Also, any remaining funds in a 529 account can be rolled over into a Roth IRA for the same beneficiary as the 529. There are prerequisites that must be met to use this new qualified distribution. Consult your qualified tax advisor for specific information. 

There’s a lot to celebrate about 529 plans on 529 Day. After all, any investment in a 529 plan is an investment in your child’s future.

Since 1989, Ohio 529 CollegeAdvantage has been helping families across the nation save for their children’s higher education with many tax benefits. Ohio 529 covers qualified expenses 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 programs, or continuing education classes nationwide that accepts federal financial aid. Learn, plan, and start for as little as $25 today at  CollegeAdvantage.  

About the author:

Trisha Good is the executive director of Ohio Tuition Trust Authority. She has proudly worked for the agency for 29 years. Since 1989, Ohio Tuition Trust Authority has sponsored and administered Ohio’s 529 College Savings Program, CollegeAdvantage. Ohio 529 oversees over 680,000 accounts and over $18.1 billion in assets as of March 31, 2025.

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529 Short Course: New Parents

5 things every new parent needs to know about saving for education

  1. Why Ohio 529?
    529s are specifically created for higher education savings. Unlike a traditional banking account, a 529 account benefits from tax-free earnings and tax-free withdrawals. For Ohio residents, there is also a state income tax deduction for those contributions.
  2. It’s simple to start.
    You can open your 529 account online in minutes with as little as $25. With ready-made portfolio options, you don’t have to be a financial expert to feel confident in your savings plan choices.
  3. Set it and forget it with automatic deposits.
    The sooner you start saving, the longer your account benefits from the Ohio 529 tax advantages as well as compound interest. Many new parents take their 529 contributions off their to-do list by setting up small automatic deposits from either their banking accounts or paycheck. Also, with our ReadySave 529 app, it’s also easy to track and adjust your account right on your mobile device.
  4. Save for college, career training, and more.
    Ohio 529 can be used at over 30,000 schools of all kinds, nationwide, including universities; community colleges; trade, technical, and vocational schools; certificate programs; and apprenticeships. Your Ohio 529 account can also pay for K-12 tuition at a public, private, or religious school. And, if it’s not needed for educational expenses, you can now roll over your 529 to a Roth IRA.
  5. Others can help.
    It’s easy for family and friends to contribute to your child’s account and receive tax benefits for themselves. You can share your account’s unique Ugift number with others to contribute online without creating their own 529 accounts. Those who live in Ohio will also receive a state income tax deduction for their contributions. Also, you can sign up to have reminder emails sent to you and loved ones for the big milestones in your child’s life.

Hoping to find gold at the end of the rainbow? If you are saving with Ohio 529 CollegeAdvantage, you have the benefit of Ugift with your account, which is savings gold.

Ugift makes it easy for others to give to your Ohio 529 account. With Ugift, you generate a unique code which allows loved ones to contribute to your Ohio 529 savings plan without needing the actual account number. Once they have the Ugift code, your friends and family can visit Ugift529.com to make their online gifts directly to your 529.

When friends and family ask for gift ideas, share that you are saving for your child’s future education with Ohio 529. Then invite them to join in with gift contributions to your Ohio 529 account with Ugift. After all, a gift for your child’s education will truly last a lifetime.

The quickest and easiest way to pass along your child’s Ugift code is with the ReadySave 529 app, which you can access as an Ohio 529 CollegeAdvantage account owner. At the bottom of every page is an Ugift icon. Click on the gift symbol to view your Ugift code which you can send immediately as an invitation via texts, emails, and Facebook/Instagram chats from your phone.

Or log into your account online to view your child’s Ugift code to send to family and friends who would like to give the gift of education.

The Ugift code doesn’t expire. Which means whenever there is an occasion to celebrate­ like baby showers, holidays, birthdays, graduations, and special achievements, your family and friends can give to your Ohio 529 account. And they can choose to contribute as much as they want whenever they want. It can be a one-time gift or recurring gift; all they need is that Ugift code. Your loved ones’ contributions - whether big or small – will add up over the years. Added to the power of compound interest, these gifts will power your 529 savings to cover even more college and career training costs.

An added bonus for gift givers who live in Ohio: They are also eligible to receive a state income tax deduction for their Ohio 529 gift contributions, up to $4,000 per year, per beneficiary.

To learn more about all of the gifting options with Ohio 529 and order cards for special occasions, visit  529 Gift Central.

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