529 College Savings Plans

College Savings Plan Comparison Chart

College Savings Plan Prepaid Tuition Plan ESA Custodial Accounts Savings Bonds

Ownership/Control Contributor. Contributor. Contributor. Custodian until child reaches age of majority. Contributor.

Investment Choices Typically, plans provide several investment options. None. No restrictions. No restrictions. Savings bonds

Age Limits None. Plan may set age or grade limits. Except for special needs children, no contributions can be made after a child reaches age 18 and withdrawals must be made before beneficiary reaches age 30. Minor child. Owner must be at least 24 before the bond's issue date (not purchase date).

Expenses Covered Besides Tuition & Fees Qualified education expenses for post-secondary education. With a few exceptions, only tuition and mandatory fees for post-secondary education are covered. Qualified elementary and secondary education expenses or qualified higher education expenses. No restrictions on types of expenses. Tuition and mandatory fees for post-secondary education and contributions to 529s and ESAs.

Contribution Limit Varies from plan to plan. Majority of plans permit total contributions in excess of $200,000 per beneficiary. Fixed by terms of contract you purchase. Contributor: $2,000 per beneficiary per year.

Beneficiary: $2,000, does not matter how many ESAs are set up. No limit. No limit.

Federal Tax Advantages Earnings grow tax deferred and are tax-free if used for qualified education expenses. Earnings grow tax deferred and are tax-free if used for qualified education expenses. Earnings grow tax deferred and are tax-free if used for qualified education expenses. $750 in earnings are tax-free. Interest grows tax-deferred and is tax-free if used for qualified education expenses.

State Tax Advantages Varies from state to state, but some states provide tax deduction for contributions, tax-free earnings growth, and tax-free withdrawals for qualified education expenses. Varies from state to state, but some states provide tax-deduction for contributions, tax-free earnings growth, and tax-free withdrawals for qualified education expenses. None. None. Interest is usually tax-exempt from state and local taxes.

Income Phase-Out None. None. Single filers: $95,000-$110,000.

Joint filers: $190,000-$220,000. None. Single Filers: $55,750-$70,750.

Joint Filers: $83,650-$113,650.

Penalties for Non-Qualified Withdrawals Earnings are taxed as ordinary income and may be subject to 10% penalty. Earnings are taxed as ordinary income and may be subject to 10% penalty. None. None. Interest earned is taxed as income.

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