What is a 529?
Learn about CollegeBound 529
A 529 plan is a tax-advantaged savings plan for future college costs. Savings can be used for tuition, books and other education-related expenses at eligible two- and four-year colleges and universities, US vocational-technical schools, and eligible foreign institutions.
Learn why college savers rely on the benefits of 529 plans.
Earnings grow tax deferred (both federal and state).
Qualified withdrawals are free from federal taxes and may be free from state taxes.1
Contributions may be eligible for a state income tax deduction.2
Small monthly contributions made via the available automatic investment option can add up over time.3
Grandparents, friends and family members can open an account and/or contribute.4
The account owner maintains control of the assets and decides when and where they're used.
Learn more about benefits for estate planning.
Learn more about college savings options.
Learn more about tax benefits per state.
1 Earnings on nonqualified withdrawals may be subject to federal income tax and a 10% federal penalty tax, as well as state and local income taxes. The availability of tax or other benefits may be contingent on meeting other requirements.
2 Rhode Island taxpayers who are account owners and contribute to CollegeBound 529 account are eligible for a deduction in computing state income tax for contributions made to CollegeBound 529 of up to $1,000 for married couples filing jointly and $500 for individual filers.
Subject to certain conditions and requirements, contributions in excess of the annual limit can be carried forward and deducted in future years. If a participant makes a non-qualified withdrawal or certain transfers /rollovers to another state's program, the amount of the deduction may be "recaptured" and included in the account owner's Rhode Island income.
Check with your tax advisor to see how 529 plans are treated for income tax purposes.
3 A plan of regular investment cannot assure a profit or protect against a loss in a declining market.
4 Any US citizen or resident alien can open and/or contribute to a 529 plan.
None of the State of Rhode Island, its agencies, Invesco Distributors, Inc., Ascensus College Savings Recordkeeping Services, LLC, nor any of their applicable affiliates provide legal or tax advice. This information is provided for general educational purposes only and is not to be considered legal or tax advice. Investors should consult with their legal or tax advisors for personalized assistance, including information regarding any specific state law requirements.