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COLLEGE SAVINGS 101
Compare savings options
Summarizes and compares the features of 529 plans, 529 ABLE plans, ESAs, UTMAs, IRAs, and education savings bonds.
| YEAR 2023 RULES | 529 Plan | Coverdell Education Savings Accounts |
|---|---|---|
| Federal Income Tax | Non-deductible contributions; withdrawn earnings excluded from income to extent of qualified higher education expenses | Non-deductible contributions; withdrawn earnings excluded from income to extent of qualified higher education expenses and qualified K-12 expenses also excluded | Federal Gift Tax Treatment | Contributions treated as completed gifts; apply $16,000 annual exclusion, or up to $80,000 with 5-year election | Contributions treated as completed gifts; apply $16,000 annual exclusion | Federal Estate Tax Treatment | Value removed from donor's gross estate; partial inclusion for death during a 5-year election period | Value removed from donor's gross estate | Maximum Investment | Established by the program; many in excess of $400,000 per beneficiary | $2,000 per beneficiary per year combined from all sources | Qualified Expenses | College tuition, fees, books, computers and related equipment, supplies, special needs; room and board for minimum half-time students. Up to $10,000 in tuition expenses for K-12 schools. Up to $10,000 in student loan repayment. | Tuition, fees, books, supplies, equipment, special needs; room & board for min. half- time students; additional types of K-12 expenses | Able to Change Beneficiary | Yes, to another member of the beneficiary's family | Yes, to another member of the beneficiary's family | Time/Age Restrictions | None unless imposed by the program | Contributions before beneficiary reaches age 18; use of account by age 30 | Income Restrictions | None | Contributions phase out for incomes between $190,000 and $220,000 (joint filers) or $95,000 and $110,000 (single filers). No annual inflation adjustment | Federal Financial Aid | Counted as asset of parent if owner is parent or dependent student | Counted as asset of parent if owner is parent or dependent student | Investments | Menu of investment strategies as developed by the program | Broad range of securities and certain other investments | Use for Nonqualifying Expenses | Withdrawn earnings subject to federal tax and 10% penalty | Withdrawn earnings subject to federal tax and 10% penalty |
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Top 529 College Savings Plans
One-year rankings are based on a plan's average investment returns over the last 12 months.
| State | Plan Name | |
|---|---|---|
| 1 | Montana | Achieve Montana |
| 2 | Nevada | USAA 529 Education Savings Plan |
| 3 | West Virginia | SMART529 Select |
Three-year rankings are based on a plan's average annual investment returns over the last three years.
| State | Plan Name | |
|---|---|---|
| 1 | West Virginia | SMART529 WV Direct College Savings Plan |
| 2 | Indiana | CollegeChoice 529 Direct Savings Plan |
| 3 | Wisconsin | Edvest |
Five-year rankings are based on a plan's average annual investment returns over the last five years
| State | Plan Name | |
|---|---|---|
| 1 | West Virginia | SMART529 WV Direct College Savings Plan |
| 2 | District of Columbia | DC College Savings Plan |
| 3 | Wisconsin | Edvest |
10-year rankings are based on a plan's average annual investment returns over the last ten years.
| State | Plan Name | |
|---|---|---|
| 1 | West Virginia | SMART529 WV Direct College Savings Plan |
| 2 | Wisconsin | Edvest |
| 3 | South Carolina | Future Scholar 529 College Savings Plan (Direct-sold) |
