You're not the only one with questions—navigating 529 plans can be complex. Find the answers to some of our frequently asked questions here.
Your account balance can be used for any purpose. However, for the distributions to be federally tax-free, you have to use the assets for one of the qualified expenses below.
Colleges, Universities, Graduate Schools, and Technical/Vocational Schools:
K–12 Tuition for Public, Private, or Religious Schools1:
Education Loan Repayment:
There are no time restrictions for using 529 college savings plan accounts, so if your beneficiary does not go to college right away, you can keep the money in your account to use at a later date. The funds may also be used for certain vocational schools or apprenticeship programs. Alternatively, you have the option to change the beneficiary on the account, or you may request a nonqualified distribution, which may be subject to federal and state income taxes and a 10% federal penalty (on the earnings portion only).
You can open an account with a recurring contribution of $50 per month or a $250 initial contribution. Minimums apply separately for each portfolio selected.
As an added benefit, if you participate in the T. Rowe Price College Savings Plan for two or more years, you may be eligible for resident tuition at the University of Alaska, regardless of where you live.
You can open an account at any time. However, if you are residing in a state in which you are pursuing state tax benefits, you likely have until the end of the calendar year or, in some states, until the April tax deadline. It is recommended that you speak with a tax professional to confirm your state’s specific requirements.
Any U.S. citizen or resident alien can open an account, as can trusts, corporations, and other organizations. A U.S. residential address is required to open an account. Your participation is not restricted by income, state of residence, or the age of the beneficiary.
Yes. You can change the account holder at any time by completing the Account Holder Change Form. The relinquishing account holder must complete the form and mail it to the address indicated on the document, and the new account holder must have an open account for the beneficiary. If the new account holder does not currently have a T. Rowe Price College Savings Plan account for the beneficiary, they must open an account prior to the account holder change. The new account may be opened online or you may complete the New Account Agreement Form and mail it along with the Account Holder Change Form.
No, each account has one account holder (person who controls the account). If the account holder is an adult—which is typically how accounts are set up—they are the only individual authorized to act on the account. Accounts with minor account holders require an adult custodian. The custodian is responsible for performing all duties of the account holder until the minor reaches the age of majority.
Account holders may authorize additional individuals with rights to account information who can contact us directly to discuss the account but cannot transact or make changes. Additionally, a third party can be added to the account to receive paper copies of all statements and/or confirmations. This third party will not have the ability to contact us directly to discuss the account unless they are also granted rights to account information by the account holder.
A custodian is only required for accounts in which the account holder is a minor or if the account is funded from assets originally held in a Uniform Gifts to Minors Act or Uniform Transfers to Minors Act (UGMA/UTMA) account. Having a custodian ensures there is a legal adult who can monitor and make changes to the account as needed.
Prior to the account holder reaching the age of majority, typically age 18, the custodian may be changed at any time with the Custodian Form. Once the minor account holder reaches the age of majority, the custodian will no longer have the authority to act on the account (special rules apply for UGMA- and UTMA-funded accounts).
Although it is not required, it is strongly recommended that you designate a successor account holder or custodian to take over the account in the event that you are no longer able to do so (death or legal incompetence). A successor can be added when the account is set up or at a later date by completing the appropriate section of the Account Services Form. For a designation or change of a successor to be valid, it must be received and processed by the plan prior to the account holder’s death or legal declaration of incompetence.
Yes, you can change your beneficiary or transfer a portion of your investment to a different beneficiary at any time with a Beneficiary/Portfolio Change Form as long as the receiving account is already established with the same account holder then the request can be made by phone. In order for the transaction to be considered a tax-free transfer by the IRS, the new beneficiary must be a member of the previous beneficiary’s family, as defined by the Internal Revenue Code, and be a member of the same generation as the previous beneficiary. If the new beneficiary belongs to a generation two or more levels below the original beneficiary, or if the beneficiaries are not related, additional taxes may apply. Furthermore, gift taxes could apply when the beneficiary is changed, depending on the amount being transferred to the new beneficiary.
Family members include:
Yes, you can. To get a head start on your expected child’s account, you can open an account designating yourself or another family member as the beneficiary (a Social Security number (SSN) is required for the person being named as a beneficiary). Once your child has received their SSN, you may change the beneficiary on the account.
To avoid tax consequences, it is important that the initial beneficiary be a family member of the expected child, as defined by the IRS. See Can I change my beneficiary? for more information.
Yes, multiple accounts can be opened for one beneficiary. For example, a parent and a grandparent can each open an account for a beneficiary. However, the maximum combined balance for a beneficiary across all 529 accounts sponsored by the Education Trust of Alaska is $550,000. Once this limit is reached, no additional contributions will be accepted, but earnings may still accrue.
Yes, you can invest in multiple portfolios within the T. Rowe Price College Savings Plan. When opening an account, you can select as many portfolios as you would like to invest in for a single beneficiary, as long as the minimum initial or recurring monthly contribution is met. If your account has already been created, you can log in online and select Contribute from the Start a Transaction drop-down menu to contribute to a new portfolio for an existing beneficiary, or call one of our College Savings Specialists at 866-521-1894 for assistance. Please note that each portfolio will have its own account number.
A bank account can be linked to your profile when opening an account and making your initial contribution.
To link your bank to an existing account, you can log in to your account online, navigate to your Profile settings, and select Add/Update Linked Bank Accounts under Financial Preferences. As an alternative, you may add a bank using the Account Services Form and following the instructions provided.
The cost of each portfolio includes a 0.04% trust fee, as well as a program management fee of either 0.02% for Enrollment-Based Portfolios or 0.05% for Static Portfolios, for the administration of the plan. The costs also include each portfolio's share of the expenses of the underlying mutual funds in which it invests, which varies by portfolio. The T. Rowe Price College Savings Plan does not charge an annual account fee or any other miscellaneous fees. For more information, see our Fees & Expenses page. These fees are reflected in each portfolio's NAV.
You may close your account by requesting a distribution of your full account balance online, over the phone by calling 866-521-1894, or by completing a Distribution Form. A closed account with a zero balance will remain in our systems for recordkeeping purposes but will be deactivated after 24 months.
Contributions by check should be mailed in along with a Contribution Slip and made payable to the T. Rowe Price College Savings Plan. Please include the account number of the receiving account on the memo line. If contributing to a new account, please mail with a New Account Agreement instead. Checks must be drawn on U.S. banks. Money orders are not accepted.
You can make a one-time contribution from your bank account at any time by logging in to your account online, selecting Contribute from the Start a Transaction drop-down menu, and following the remaining prompts.
For instructions on how to add a bank account to your online profile, see How do I link my bank account to my T. Rowe Price College Savings Plan account?
You can add, change, or stop your recurring contributions from your bank account at any time by logging in to your account online and selecting Automatic Monthly Contributions from the Start a Transaction drop-down menu or by completing and mailing the Account Services Form.
Additionally, contributions may be established with a frequency of your choosing, whether that’s monthly, weekly, or on a specific date(s). For more information on Automatic Monthly Contributions, see our Account Holders page.
Yes. To set up this service, please follow the steps listed below:
Before you initiate the rollover process, we recommend contacting the current provider/manager to verify the funds are eligible for a rollover to the T. Rowe Price College Savings Plan and what their requirements are for processing a rollover.
Once you have confirmed your funds are eligible for a rollover:
Rollovers are generally tax-free, and rollovers from another 529 plan are limited to once every 12 months for the same beneficiary. If the Beneficiary changes, there is no limit on rollovers between 529 plans. You can roll over funds between 529 plans any time for a different beneficiary as long as that beneficiary is a member of the previous beneficiary’s family.
Additional details can be found in our Plan Disclosure Document.
Anyone can contribute to your T. Rowe Price College Savings Plan account, and the GoTuition® gifting portal makes it easy. Once you have created the free online profile, you will receive a unique link that you can share with friends and family, which they will use to contribute to your beneficiary’s account directly. More information can be found on our GoTuition® Gifting page.
Alternatively, friends and family can choose to contribute by check, made payable to the T. Rowe Price College Savings Plan and mailed with a Contribution Slip. The account number of the beneficiary's account will need to be provided with the check.
You can open an account with recurring contributions of $50 per month, or a minimum initial contribution of $250 is required. Minimums apply separately for each portfolio. Once an account has been opened, subsequent contributions require a minimum of $50. The maximum account balance for a beneficiary across all portfolios and accounts is $550,000. It is acceptable for earnings (but not contributions) to cause the total account value to go over this amount. This limit includes contributions made to all qualified tuition programs sponsored by the Education Trust of Alaska for the beneficiary.
Use our College Savings Calculator to help estimate how much you may need to save for your future college costs and to set monthly investment goals to help you get there. Input your child’s age, current contributions, and additional investment details to generate results on what you may need to save.
Your investment earnings depend on the market's overall performance and the specific investment portfolio that you choose. Each account fluctuates based on market conditions. Although past performance cannot guarantee future results, you can review the Historical Performance of our portfolios.
Each time you make a contribution, you may select a different portfolio. Current requirements allow you to make changes to your existing investment options twice per calendar year per beneficiary. To move money from one portfolio to another portfolio for the same beneficiary, log in to your account and select Exchange from the Start a Transaction drop-down menu. From there, you can transfer money between one or more portfolios that you are already invested in or you can exchange into a new portfolio.
No. The 14 plan-specific portfolios are the only investment options available.
Assets from a taxable investment account cannot be transferred directly to a 529 plan. If you wish to move any invested money from a taxable account to a 529 account, you must request a withdrawal from the taxable account and then contribute the account proceeds separately.
After logging in to your account online, you may select the Performance tab to view your account’s performance and activity, portfolio growth, and personal rate of return or the Transactions tab to see pending or previous transactions. All T. Rowe Price College Savings Plan account holders also receive quarterly statements detailing account activity and balance.
If you need to take a nonqualified distribution, please also see What if I use money from my 529 account for something other than a qualified education expense?
Where and how distributions are issued varies depending on the distribution method selected. Your options are as follows:
It is important to note that tax reporting of a distribution is dependent on the payee of the distribution. If a distribution is made payable to the account holder, the tax reporting will be issued under the account holder’s Social Security number, and a Form 1099-Q will be mailed to the account holder’s address on file. All other distributions are reported under the beneficiary’s Social Security number, and a Form 1099-Q will be mailed to the beneficiary’s address on file.
Colleges or Universities, Graduate Schools, Apprenticeship Programs, and Technical/Vocational Schools:
K–12 Tuition for Public, Private, or Religious Schools1:
Education Loan Repayment:
We do not require receipts of qualified education expenses. Rather, it is the taxpayer's responsibility to substantiate a qualified distribution to the IRS. Therefore, it is important to maintain accurate records concerning your distributions, which could include receipts and other documentation of education-related expenses.
If you take a distribution for something other than a qualified education expense, the earnings portion is subject to federal income taxes and may be subject to a 10% federal tax penalty. State tax treatment varies. Exceptions to the federal penalty apply for nonqualified distributions that are taken under the following circumstances:
If your beneficiary has leftover savings, you can:
A 529 plan owned by a custodial parent for a dependent student typically counts as a parental asset on the Free Application for Federal Student Aid (FAFSA), and it may reduce need-based aid by a maximum of 5.64% of the 529 account’s value.
Many colleges and universities have tools on their websites to help plan for financial aid assistance in paying for school. Visiting the financial aid section of your desired school’s website and using its calculator can help to estimate how much aid you may be eligible for. FAFSA also has a federal student aid estimator on its website that can help families plan ahead.
With a financial aid package in mind, you can utilize our College Savings Calculator to help develop a savings strategy for covering the remaining balance.
There are several options available if your beneficiary receives a scholarship:
Your 529 contributions are not deductible from federal taxes; state income tax treatment varies.
For residents of one of the following states, contributions to the T. Rowe Price College Savings Plan may be deductible from state income taxes:
This list is subject to change. Check with your state or with a tax professional for additional details and to determine what documentation, if any, is required when filing. In most cases, contributions must be made by December 31 of the tax year to qualify for that year’s tax deductions, but in some states, you will have until the April tax filing deadline.
Your yearly contributions can be reported when you file your state income taxes. You will receive a year-end statement by mail that reflects your total contribution amount in early January. To opt-in to receive paperless statements or to change your delivery settings, you can update your profile’s document delivery settings. Please note, there is no tax form that reports 529 contributions.
Distributions used to pay for qualified education expenses are generally exempt from taxes. If a distribution is nonqualified, any earnings portion of the distribution may be subject to federal income taxes as well as a 10% federal tax penalty. The distribution may also be subject to state income tax laws as applicable. See What if I use money from my 529 account for something other than a qualified education expense?
Regardless of whether your distributions are used for qualified or nonqualified expenses, the T. Rowe Price College Savings Plan will issue Form 1099-Q after the close of the calendar year for the 12 months prior. It is the taxpayer’s responsibility to substantiate a qualified distribution to the IRS. Therefore, it is important to maintain accurate records of any distributions and qualified education expenses.
If money from your 529 account is used to pay for nonqualified expenses, no additional taxes or penalties are assessed on the contributions portion of the distribution (contributions are made after tax), but taxes and a 10% penalty will generally apply to any earnings portion of the distribution. If the distribution was made payable to the account holder, the account holder will receive Form 1099-Q and will be responsible for reporting the distribution on their taxes and for paying the taxes and/or penalty. For all other payees, the Form 1099-Q will be issued to the beneficiary and they will be responsible for reporting the distribution on their taxes and for paying any related taxes and/or penalty.
Each January, the T. Rowe Price College Savings Plan issues Form 1099-Q for any distributions taken during the previous calendar year. This form is mailed to the beneficiary; however, if the distribution was made payable to the account holder, the form is issued to the account holder instead. An account holder payee can also access the form by logging in to their account online and clicking the Taxes tab from their dashboard.
No tax forms are issued for 529 contributions.
There are both estate and gift tax benefits to contributing to a 529 account.
If the amounts contributed by you on behalf of the beneficiary together with any other gifts to that beneficiary (over and above those made to your account) during the year do not exceed $17,000 ($34,000 for if you are a married couple filing jointly), no gift tax will be imposed for that year. For 529 plans, contributions of up to $85,000 can be made in a single year ($170,000 if you are a married couple filing jointly) for a beneficiary and averaged over five years for purposes of the federal gift tax exclusion.2 The ability to average an $85,000 gift over five years is a benefit that is unique to 529 plans. This allows you to efficiently move assets over and above the $17,000 gift-tax exclusion limit into a tax-deferred investment.
By contributing to a 529 plan account in which the gift-giver is also the account holder, they—not the beneficiary—maintain control of the account and can utilize it as an estate planning tool. The money in an account is generally not included in the account holder’s estate, although certain exceptions may apply.
Further rules regarding gift and estate taxes may apply and are subject to change. You should consult a tax professional to discuss your situation and the impact of these complex rules in detail.
1While distributions from 529 plans for elementary or secondary education tuition expenses are federally tax-free, state tax treatment will vary and could include state income taxes assessed, the recapture of previously deducted amounts from state taxes, and/or state-level penalties. You should consult with a tax or legal advisor for additional information.
2Amounts listed are for the tax year 2023. Future years may differ.