What happens to money in 529 if not used?
If you truly have no other use for your leftover 529 plan savings, you can always take a non-qualified distribution. Your contributions will never be taxed or penalized, since they were made with after-tax dollars. Any earnings on your investments, however, will be subject to income tax as well as a 10% penalty.
How much can a parent contribute to a 529 per year?
In either case, parents receive the same treatment as any other person making a contribution: each parent can give up to $15,000 annually to their child's 529 plan without having to file a gift tax return, for a total of $30,000 per year.
Can you deduct 529 contributions in Indiana?
Indiana taxpayers can get a state income tax credit equal to 20% of their contributions to a CollegeChoice 529 account, up to $1,000 per year ($500 for married filing separately). Tax-deferred growth. Earnings grow tax deferred from federal and state taxes. Tax-free withdrawals.
At what age do you have to stop contributing to a 529?
There are no time or age limits on using a state 529 college savings plan. Money can be kept in a 529 plan indefinitely. 529 plans can be used for graduate school, not just undergraduate school, and can be passed on to one's children. There is also no age limit on contributions to a 529 plan.
Can beneficiary of 529 withdraw money?
529 plan account owners can withdraw any amount from their 529 plan, but only qualified distributions will be tax-free. The earnings portion of any non-qualified distributions must be reported on the account owner's or the beneficiary's federal income tax return and is subject to income tax and a 10% penalty.
Are college 529 plans worth it?
Is a 529 Plan Worth It? The advantages of a 529 plan make it a smart way to save for college in certain circumstances. For example, if you're sure you've got a child who's destined for higher education and you can afford to make contributions, the 529 plan is an excellent way to go.
How much can you contribute to a 529 plan in 2021?
In 2021, that means you can contribute up to $15,000 per beneficiary ($30,000 per married couple) to a 529 plan without having to pay gift taxes. If you set up more than one 529 plan this year, you can contribute up to $15,000 to each without having to file a gift-tax return.
How much can you contribute to a 529 plan in 2021 in Indiana?
Annual 529 plan contribution limits
529 plans do not have annual contribution limits. However, contributions to a 529 plan are considered completed gifts for federal tax purposes, and in 2022 up to $16,000 per donor ($15,000 in 2021), per beneficiary qualifies for the annual gift tax exclusion.