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Arkansas Brighter Future Direct Plan

4 / 5

Our rating

Good AR resident benefits

AR resident benefits

The team of Ascensus College Savings and The Vanguard Group manages the Arkansas Brighter Future Direct Plan, featuring target enrollment portfolio and static portfolio options utilizing Vanguard mutual funds, and an FDIC-insured savings option. Accounts can be linked to the Upromise rewards service.

Arkansas Brighter Future Direct PlanHonors

KEY METRICS

OVERVIEW

Program type

Savings

Inception

1999, but substantially changed in February 2005

State agency

The Arkansas 529 Plan Review Committee, composed of the Director of the Department of Higher Education, the Executive Director of the Arkansas Teacher Retirement System, and the Arkansas State Treasurer

Tax deduction

For single filers: $5,000/yr per beneficiary

For joint filers: $10,000/yr per beneficiary

Program manager

Ascensus College Savings, with The Vanguard Group as investment manager

Program distributor

Ascensus College Savings

Manager contract term

Eligibility

State residency requirements:

None

Who can be a participant/owner in the program?

U.S. citizens and resident aliens 18 years old or older, UGMA/UTMA custodians, and legal entities.

Significant time or age restrictions imposed by the program:

None

Contributions

Maximum contributions:

Accepts contributions until all account balances in Arkansas' 529 plans for the same beneficiary reach $500,000.

Minimum contributions:

With lump-sum contributions, the minimum initial contribution is $25, and the minimum subsequent contribution is $10. With the automatic investment plan, the minimum contribution level is $10 per month or $30 per quarter via bank transfer or $5 per pay period via payroll deduction.

Does the program offer an e-gifting platform for receiving gift contributions?

This plan offers a robust gifting platform that allows gift-givers to save their own profile for recurring or future contributions.

SPONSORED

Other great plans to consider

You are not limited to your own state's 529 plan, so compare the plan and tax benefits offered by your state to other options. Here are some plans that are available to residents of any state and have earned awards in our 529 Plan Ratings:

Investment Options

Investors in Arkansas Brighter Future Direct Plan can select from the following investment options. Click on a portfolio name for more information.

The Age-Based option is offered in 3 different risk levels (Aggressive, Moderate, and Conservative) each containing 9 portfolios of underlying mutual funds. Contributions are placed into the portfolio corresponding to the risk level selected and the number of years to expected enrollment, and later reassigned to more conservative portfolios as the beneficiary approaches college age.

Age-based/Enrollment Year investment options:

The Age-Based option is offered in 3 different risk levels (Aggressive, Moderate, and Conservative) each containing 9 portfolios of underlying mutual funds. Contributions are placed into the portfolio corresponding to the risk level selected and the number of years to expected enrollment, and later reassigned to more conservative portfolios as the beneficiary approaches college age.

Static investment options:

Select among 5 multi-fund portfolios with varying risk tolerances, a money-market portfolio, and an FDIC-insured savings option.

Underlying investments:

Vanguard mutual funds, Sallie Mae

Underlying fund allocations:

Portfolio Fees & Performance Lookup

Fees & Expenses

Enrollment or application fee:

None.

Account maintenance fee:

$20 annually, waived for Arkansas residents.

Program management fees:

0.48% manager fee; fee includes underlying fund expenses and a 0.07% fee to the state; 0.32% for the Savings Portfolio

Expenses of the underlying investments:

Not applicable, included in the program management fee.

Total asset-based expense ratio:

0.53%; 0.39% for the Savings option

Taxes and other Benefits

Tax deduction for single filers:

$5,000/yr per beneficiary

Tax deduction for joint filers:

$10,000/yr per beneficiary

Program match on contributions:

The Aspiring Scholars Matching Grant Program program was discontinued as of January 1, 2017 and is no longer available to new account owners. Beginning in 2008, the program provided matching grants of up to $500 annually to eligible Arkansas families, based on household income level. Account owners with matching grant accounts may continue to access matching grant funds for qualified withdrawals until the funds have been exhausted.

State tax deduction or credit for contributions:

Contributions to Arkansas 529 plans of up to $5,000 ($10,000 total per married couple), are deductible in computing Arkansas state income tax. Contributions greater than these amounts may be carried forward to the next succeeding four (4) tax years. Contributions to non-Arkansas 529 plans of up to $3,000 ($6,000 total per married couple) are deductible in computing Arkansas state income tax provided the taxpayer has not deducted the contribution on another state's income tax return. Rollover contributions from an out-of-state 529 plan to an Arkansas 529 plan of up to $7,500 ($15,000 per married couple) are deductible in the tax year the contribution is rolled over. Contributions sent by mail must be postmarked by December 31 of the tax year.

Calculate your Arkansas 529 tax benefit

Find out how much you can save on state taxes this year by contributing to a Arkansas 529 plan.

Your tax savings per year
$0

Household income

$100,000

Monthly Contribution

$100

State tax recapture provisions:

Arkansas state tax deductions will be subject to recapture in subsequent years if Non-Qualified Withdrawals are made or the Arkansas taxpayer rolls the Account over to a tax deferred tuition savings program established by another state.

State definition of qualified expenses

The state conforms with the federal definition of qualified education expenses, which includes expenses for higher education, apprenticeship programs, interest and/or principal on qualified education loans up to a $10,000 lifetime cap, and up to $10,000 per year in tuition in connection with enrollment or attendance at an elementary or secondary public, private, or religious school.

State tax treatment of qualified distributions:

Qualified distributions from Arkansas and non-Arkansas 529 plans are exempt.

State tax treatment of rollovers:

Arkansas follows federal tax-free treatment for rollovers except that outbound rollovers are subject to the recapture of prior state tax deductions. Inbound rollover contributions from another state's plan are deductible in the amount of $7,500 per individual and $15,000 per couple.

Does the sponsoring state exclude the value of an account for state financial aid purposes?

No

Does participation in the program provide beneficiaries with any advantages in qualifying for resident tuition status at state institutions?

No

Is there a rewards program or outside scholarship program that works with this program?

Yes, the Upromise Rewards program can be linked to any 529 college savings plan. Upromise Rewards is free to join and offers members cash back for college.

Statutory protection of an account from creditors:

Distributions & Terminations

To whom are distributions made payable:

Eligible educational institution, beneficiary, or account owner, as directed by the account owner.

Account Changes

Policy regarding participant/owner changes:

Accepts requests to transfer account ownership.

Documents, Access & Reporting

Does participant have online password-protected access to account?

Yes

Can the complete enrollment process including funding be done online?

Yes

Documents and other services accessible or downloadable on the program's public Web site:

Contact

A good place to start:

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