What is a 529 Plan?
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To open the account, you must be a US resident, age 18 or over, with a US mailing and legal address, and a Social Security number or Tax ID.
The beneficiary can even be the same person who sets up the account.
There may be benefits to opening an account. The account owner keeps control of the money, can make investment decisions, and can even change the beneficiary if plans change. There may be estate tax benefits in some cases.
But you can also gift money to an existing 529 plan account. In fact, account owners can enroll in our free . It lets family and friends contribute gifts electronically and makes it easy for account owners to send invitations and track gifts from their private dashboard.
Once assets are in the account, they are generally considered to be out of the account owner's estate.
There are exceptions to the 10% penalty—for instance, if the beneficiary receives a scholarship or attends a US military academy. Any earnings would still be subject to federal income tax and any state and local taxes.
800-544-1914 * An accelerated transfer to a 529 plan (for a given beneficiary) of $80,000 (or $160,000 combined for spouses who gift split) will not result in federal transfer tax or use of any portion of the applicable federal transfer tax exemption and/or credit amounts if no further annual exclusion gifts and/or generation-skipping transfers to the same beneficiary are made over the five-year period and if the transfer is reported as a series of five equal annual transfers on Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return. If the donor dies within the five-year period, a portion of the transferred amount will be included in the donor's estate for estate tax purposes. The UNIQUE College Investing Plan, U.Fund College Investing Plan, DE529 Education Savings Plan, AZ529, Arizona's Education Savings Plan, and the Connecticut Higher Education Trust (CHET) 529 College Savings Plan - Direct Plan are offered by the state of New Hampshire, MEFA, the state of Delaware, and the state of Arizona with the Arizona State Treasurer's Office as the Plan Administrator and the Arizona State Board of Investment as Plan Trustee, and the Treasurer of the state of Connecticut respectively, and managed by Fidelity Investments. If you or the designated beneficiary is not a New Hampshire, Massachusetts, Delaware, Arizona or Connecticut resident, you may want to consider, before investing, whether your state or the beneficiary's home state offers its residents a plan with alternate state tax advantages or other state benefits such as financial aid, scholarship funds and protection from creditors. Units of the portfolios are municipal securities and may be subject to market volatility and fluctuation. Please carefully consider the plan's investment objectives, risks, charges, and expenses before investing. For this and other information on any 529 college savings plan managed by Fidelity, contact Fidelity for a free Fact Kit, or view one online. Read it carefully before you invest or send money. 433515.16.2
Fidelity does not provide legal or tax advice, and the information provided is general in nature and should not be considered legal or tax advice. Consult an attorney, tax professional, or other advisor regarding your specific legal or tax situation.
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Mutual Funds and Mutual Fund Investing - Fidelity Investments
Clicking a link will open a new window.What is a 529 plan
Reach your college savings goals with a flexible, tax-advantaged 529 plan.Go
Why should you consider a 529 plan
Savings for education
A 529 plan is a tax-advantaged savings account designed to be used for the beneficiary's education expenses.Flexibility
Use the money in your 529 for a wide range of educational expenses including college expenses, K–12 tuition, certain apprenticeship costs, and even student loan repayments.Control
Unlike a custodial account, with a 529 plan the account owner maintains ownership of the account until the money is withdrawn.Tax advantages
Pay taxes on earnings later—or not at all There may be tax advantages to saving in a 529 plan. As long as the money stays in the account, no income taxes will be due on earnings. When you take money out to pay for qualified education expenses, those withdrawals may be federal income tax-free—and, in many cases, free of state tax too.Who can open a 529 plan account
US residents, all income levels There are no income restrictions on 529 plan accounts.To open the account, you must be a US resident, age 18 or over, with a US mailing and legal address, and a Social Security number or Tax ID.
Who can be a beneficiary
Anyone with a Social Security or Tax ID number Anyone, of any age, with a Social Security or Tax ID number can be a beneficiary.The beneficiary can even be the same person who sets up the account.
How grandparents relatives and friends can help
Open an account or gift money to an existing account Anyone who wants to save for a child's education can open a 529 plan account.There may be benefits to opening an account. The account owner keeps control of the money, can make investment decisions, and can even change the beneficiary if plans change. There may be estate tax benefits in some cases.
But you can also gift money to an existing 529 plan account. In fact, account owners can enroll in our free . It lets family and friends contribute gifts electronically and makes it easy for account owners to send invitations and track gifts from their private dashboard.
Gift and estate planning benefits
Contributions (up to a certain amount) are not subject to the federal gift tax Contribute up to $80,000 ($160,000 per married couple) per beneficiary in a single year without eating into your lifetime gift-tax exclusion.*Once assets are in the account, they are generally considered to be out of the account owner's estate.
Professional money management
Take advantage of professional money management experience from Fidelity Your investment options include age-based investment strategies managed by Fidelity or you can build a custom investment mix from pre-set portfolios made up of Fidelity mutual funds, index funds, and bank deposit accounts.Withdrawals from a 529 plan account
Take advantage of professional money management experience from Fidelity Withdrawals from a 529 plan account can be taken at any time, for any reason. But, if the money is not used for qualified education expenses, federal income taxes may be due on any earnings withdrawn. A 10% federal penalty tax and possibly state or local tax can also be added.There are exceptions to the 10% penalty—for instance, if the beneficiary receives a scholarship or attends a US military academy. Any earnings would still be subject to federal income tax and any state and local taxes.
Learn more
Access a library of courses, articles, and videos to learn more about planning and saving for college. Understand what it's like to have an account, from choosing a plan to withdrawing funds. See if you're on track to meet your college savings goals.Ready to get started
Questions?800-544-1914 * An accelerated transfer to a 529 plan (for a given beneficiary) of $80,000 (or $160,000 combined for spouses who gift split) will not result in federal transfer tax or use of any portion of the applicable federal transfer tax exemption and/or credit amounts if no further annual exclusion gifts and/or generation-skipping transfers to the same beneficiary are made over the five-year period and if the transfer is reported as a series of five equal annual transfers on Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return. If the donor dies within the five-year period, a portion of the transferred amount will be included in the donor's estate for estate tax purposes. The UNIQUE College Investing Plan, U.Fund College Investing Plan, DE529 Education Savings Plan, AZ529, Arizona's Education Savings Plan, and the Connecticut Higher Education Trust (CHET) 529 College Savings Plan - Direct Plan are offered by the state of New Hampshire, MEFA, the state of Delaware, and the state of Arizona with the Arizona State Treasurer's Office as the Plan Administrator and the Arizona State Board of Investment as Plan Trustee, and the Treasurer of the state of Connecticut respectively, and managed by Fidelity Investments. If you or the designated beneficiary is not a New Hampshire, Massachusetts, Delaware, Arizona or Connecticut resident, you may want to consider, before investing, whether your state or the beneficiary's home state offers its residents a plan with alternate state tax advantages or other state benefits such as financial aid, scholarship funds and protection from creditors. Units of the portfolios are municipal securities and may be subject to market volatility and fluctuation. Please carefully consider the plan's investment objectives, risks, charges, and expenses before investing. For this and other information on any 529 college savings plan managed by Fidelity, contact Fidelity for a free Fact Kit, or view one online. Read it carefully before you invest or send money. 433515.16.2
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Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917
796549.1.0