6 must-know 529 plan rules

Kathryn FlynnBy Kathryn FlynnBy Savingforcollege.com
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Many parents and grandparents are confused about 529 plan rules. A 529 college savings plan is an investment account whereyour money grows tax-free if it’s used to pay for qualified education expenses. This includes college costs, as wellas $10,000 per year in tuition expenses at private, public or religious elementary and secondary schools. Unlike othersavings vehicles, there are no income limits, and no time limits imposed. In our Annual College Savings Survey, we presented six true or false questions about 529 rules to visitors of Savingforcollege.com.Click through the slideshow to see where the biggest misconceptions lie!



1. I must use the 529 plan offered by my state of residence - FALSE

  • 20% of total respondents answered incorrectly
  • 18% of grandparents and 21% of parents answered incorrectly
  • You can enroll in almost any state’s 529 plan, no matter where you live, but your home state many offer a state tax benefitsfor residents.

Find your 529 plan - Select your state below

Did you know that residents are not limited to investing in their own state's plan? Another state may offer a plan that performs better and has lower fees. Select your state below to see your state's plan and other options.

Find a 529 plan in

Select your state below

AL AK AZ AR CA CO CT DE FL GA HI ID IL IN IA KS KY LA ME MD MA MI MN MS MO MT NE NV NH NJ NM NY NC ND OH OK OR PA RI SC SD TN TX UT VT VA WA WV WI WY DC

Find a 529 Plan. Select your state below.

Did you know that residents are not limited to investing in their own state’s plan? Another state may offer a plan that performs better and has lower fees. Select your state below to see your state’s plan and other options.

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