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FAQ

 

 

 

 

 

 

Top Questions

Have questions about 529 plans and how they can help you save for college?
Here are the top questions we receive:

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What are the federal and state tax advantages?

When you contribute to the Edvest College Savings Plan, any account earnings can grow federal and Wisconsin income tax free. Plus, withdrawals used to pay for qualified higher education expenses will be free from federal and Wisconsin income tax. Non-qualified withdrawals may be subject to federal and state taxes and the additional federal 10% tax.

Is there a Wisconsin income tax benefit?

Yes, if you are a Wisconsin taxpayer, your contributions to Edvest reduce Wisconsin taxable income up to a maximum of $3,100 per beneficiary for 2015. The deadline for contributing in order to impact your 2015 Wisconsin tax return is April 15, 2016. Contribution amounts exceeding the maximum deduction amount for the tax year may be carried forward to future tax years and deducted subject to the maximum deduction amount of those years. If you are making a contribution January 1 – April 15, 2016, please indicate if your contribution is to be applied to 2015. For more details, including treatment of rollovers, non-qualified withdrawals and recapture provisions, read the Disclosure Bookletand check with your tax advisor.

Who can open an account?

Any individual with a Social Security number or federal Taxpayer Identification Number who is a U.S. citizen or resident alien can open an account and contribute to an Edvest account on behalf of any beneficiary. You can even open an account for yourself. An organization described in Section 501(c)(3) of the Internal Revenue Code, an estate or a trust may also open an account. Such entities will be subject to additional restrictions or administrative requirements and may not open an account online or participate in e-Delivery. Open an account today.

What are my investment choices?

The Plan offers you a choice of 22 investment options. These investment options vary in their investment strategy and degree of risk, allowing you to select an investment option or combination of investment options that may fit your needs. To see the list of investment options, brief descriptions and associated fees and expenses, visit Investment Options. For more information about investment risks and the type of investor for whom each investment portfolio may be appropriate, read the Disclosure Booklet (PDF).

Where do I get information on Edvest performance?

Edvest performance for the 22 investment options is available online. Go to Investment Performance.

How do I sign up for payroll deduction?

Do I have to use my account at a Wisconsin college or university?

No. The money in your account may be used at any eligible educational institution. This includes public and private colleges and universities, graduate and post-graduate schools, community colleges, and certain proprietary and vocational schools.

How do I read my quarterly statement?



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About 529 Plans

  • What is a 529 Plan?

    Just as a 401(k) plan is for retirement savings, a 529 plan is for college savings. 529 refers to Section 529 of the Internal Revenue Code. By federal law, all 529 college savings plans must be state sponsored. Residents of any state can invest in any state's 529 plan; you do not need to be a resident of a particular state to invest in that state's plan. However, there may be tax advantages available only to state residents for any particular state-sponsored plan. There are several types of 529 plans, including state-sponsored college savings plans and state-sponsored prepaid plans. With all 529 plans—both savings, and prepaid—there is no income or age limit for participation. You can even open an account for yourself. Visit our interactive comparison tool to compare features and benefits of these plans.
  • How do 529 plans vary?

    529 plans vary in a number of ways, including contribution limits to the account (defined by the sponsoring state), fees to open and maintain an account, in-state tax treatments such as a state tax deduction, investment options offered, and the financial services company that manages the plan. There may also be other differences, such as special programs or benefits defined by the particular plan. Before investing in a 529 plan, you should consider whether the state you or your designated beneficiary reside in or have taxable income in has a 529 plan that offers favorable state income tax or other benefits that are only available if you invest in that state's 529 plan.
  • How does a 529 Plan compare to other investment choices, such as custodial accounts?

    To compare features of 529 plans and custodial accounts, use our interactive comparison tool.
  • How do I compare college savings options?

    Check out our interactive comparison tool.
  • About TIAA-CREF

    TIAA-CREF is a $481 billion* full-service financial services group of companies that is dedicated to helping those in the academic, medical, cultural, and research fields for more than 90 years. Our clear and long-held commitment to serving the financial best interests of those who serve the benefit and enlightenment of others has never and will never change. * Combined assets under management as of 6/30/2012.

Tax Considerations

  • What are the federal estate and gift tax benefits?

    Contributions to Edvest may help you reduce the taxable value of your estate. Contributions to the Plan, together with all other gifts from the account owner to the beneficiary, may qualify for an annual federal gift tax exclusion of $14,000 per donor ($28,000 for married contributors), per beneficiary for 2013. If an account owner's contribution to a Plan account for a beneficiary in a single year exceeds $14,000 ($28,000 for married contributors), the account owner may elect to treat up to $70,000 of the contributions, or $140,000 for joint filers, as having been made over a period of up to five years for federal gift tax exclusion. Consult your tax advisor.
  • Are contributions to Edvest federal tax deductible?

    No, contributions to Edvest or any 529 plan are not deductible for federal income tax purposes.
  • How are withdrawals for qualified higher education expenses taxed?

    If you are taking a withdrawal to pay for qualified higher education expenses of the beneficiary, there will be no federal or Wisconsin income tax. Use the Withdrawal Form (PDF).
  • What is a taxable withdrawal?

    Taxable withdrawals are withdrawals due to the beneficiary's death, the permanent disability of the beneficiary, the beneficiary’s receipt of a scholarship award or certain other tax-free amounts, or the beneficiary’s attendance at a military academy. A taxable withdrawal will be subject to applicable federal income tax on earnings, if any, but will not be subject to the federal 10% additional tax on earnings (the "Additional Tax").
  • How are withdrawals for non-qualified expenses taxed?

    A non-qualified withdrawal is any withdrawal that does not meet the requirements of being: (1) a qualified withdrawal; (2) a taxable withdrawal; or (3) a rollover. The earnings portion of a non-qualified withdrawal is subject to federal income taxation and the additional 10% federal tax. See the Disclosure Booklet for details.
  • What is the Generation Skipping Tax?

    Transfer of funds or a change in beneficiary is subject to the Generation Skipping Tax (GST) if the new beneficiary is two or more generations below the prior beneficiary. If transfer is subject to GST, tax is imposed on the prior beneficiary. Account owners should consult their own tax advisors for guidance when considering a change of beneficiary or a transfer to another account.
  • Is there a penalty for transferring all or a portion of my Edvest account to another State's 529 Plan?

    The amount of an outgoing rollover made to another state's 529 Plan on or after June 1, 2014 will be added to Wisconsin income and taxed to the extent that the amount was previously claimed as a deduction. On or after June 1, 2014, Non-Qualified Withdrawals of contributions made after 2013 will be added to Wisconsin income and taxed to the extent the receipt of such amounts results in the Additional Tax for federal tax purposes. Check with your tax advisor for more information.

Investment Options and Performance

  • Can I see a list of the funds that comprise the investment portfolios?

    Yes. For a list of the underlying funds, read the Disclosure Booklet
  • Can I select the investments for my account?

    You may choose among the 22 Edvest investment options, but not the underlying mutual funds or other investment vehicles to which funds in the investment portfolio may be allocated. Under federal law, an account owner may not have direct or indirect control over the investments in a 529 Plan. See the Disclosure Booklet for a list of underlying funds.
  • Can I change my investment selection?

    Yes. Each time you make a contribution you may select any one of the 22 Edvest investment portfolios. Once invested in a particular investment portfolio, contributions and any earnings may be transferred to another investment portfolio only twice per calendar year or upon a transfer of funds to a Plan account for a different eligible beneficiary (see the Plan Disclosure Booklet for more information). Use the Rebalance Form.

Opening an Account, Contributions and Fees

  • How do I open an account?

    You can Enroll Online and submit your initial contribution electronically from your bank account or establish an Automatic Contribution Plan (PDF). You can also Download Enrollment Materials, or you can Request an Enrollment Kit to have enrollment materials mailed to your address. Allow five to seven days for delivery.
  • Are there any fees associated with opening an Edvest account?

    An annual asset-based management fee will be paid to TIAA-CREF Tuition Financing, Inc. to cover the cost of investment management and administrative services. The estimated underlying fund expenses range from 0.0% to 0.36%. The Principal Plus Interest Portfolio has no annual asset based fees. Please note that the State of Wisconsin reserves the right to change the current fee and impose new or additional fees, expenses, charges or penalties in the future. For details on the management fee, please see fees and expenses.
  • What is the maximum that I can contribute to an account?

    There is no annual limit on the amount you may contribute. However, there is an overall maximum account balance limit of $425,000, which applies to all accounts opened for a beneficiary. An account owner may contribute to a beneficiary's account if, at the time of the contribution, the total balance of all accounts for that beneficiary does not exceed $425,000. Accounts that have reached the maximum account balance limit may continue to accrue earnings.
  • Can I take a distribution (withdrawal) from both an Edvest account and Coverdell Educations Savings Account to pay for expenses in the same year?

    Yes. However, you must apply the distributions to different eligible expenses in order to obtain the favorable tax treatment. See IRS Publication 970 for more detail or consult your tax advisor.
  • How do I contribute to Edvest?

    You can open an account by check, through the automatic contribution plan, by electronic funds transfer (including electronic purchase option), or through a transfer of funds between accounts or a rollover. The minimum contribution required to open an account is $25 per investment portfolio. The minimum amount for subsequent contributions is also $25 per investment portfolio. For payroll deductions, the minimum contribution is $15 per investment portfolio per pay period. Each account can have only one account owner and one beneficiary. However, each beneficiary may have more than one account and, you may open separate accounts for as many different beneficiaries as you wish. To set up an automatic contribution plan log-in to your account or use the Electronic Banking Form (PDF). To set up Payroll Deduction, use the Payroll Deduction Form (PDF).
  • How do I keep track of my account?

    You have online access to your account information 24 hours a day, or you can call and speak to one of our college-savings specialists toll free at 1-888-338-3789, Monday through Friday, 7 am - 7 pm CT. You'll receive quarterly and annual statements that show account activity. A separate confirmation statement will also be mailed, which lists every transaction made to the account. (Quarterly statements will be provided for periodic payment plans, such as payroll deduction.) Log-in to your account.
  • How do I sign up for e-Delivery

    If you'd like to receive your account statements and/or Plan disclosure electronically, click here to log into your account, and click on "Change Account Statement Delivery."

Plan Requirements, Using the Funds

  • How do I know which educational institutions are eligible?

    Contact your school to determine if it qualifies as an eligible educational institution or use the Federal School Code Search on the Free Application for Federal Student Aid (FAFSA) website.
  • What are the qualified higher education expenses?

    Qualified higher education expenses include tuition, fees, and the cost of books, supplies, and equipment required for the enrollment and attendance of the beneficiary at an eligible educational institution, and certain room and board expenses. Qualified higher education expenses also include certain additional enrollment and attendant costs of a beneficiary who is a special needs beneficiary in connection with the beneficiary's enrollment or attendance at an eligible institution. For this purpose, an eligible educational institution generally includes accredited postsecondary educational institutions offering credit toward a bachelor's degree, an associate's degree, a graduate-level degree or professional degree, or another recognized postsecondary credential.
  • How do I withdraw money to pay for college?

    When you want to withdraw money (take a distribution) from your account, you may request a withdrawal from your account online that will be sent via Automated Clearing House* to your bank account, typically within 3 business days, as long as your banking information has been on file for at least 30 days and your address has not changed within the last 30 days. You may also request a withdrawal using the Withdrawal Form (PDF). This form can be used for withdrawals for qualified higher education expenses of your beneficiary, non-qualified withdrawals, or withdrawals due to death, disability or scholarship. Allow 7-10 days for mail and processing time. Note: Non-qualified withdrawals may be subject to federal and state income taxes and a 10% additional federal tax. Keep your receipts.

    *Automated Clearing House payments may take several days to be deposited into your bank account.
  • If I move out of Wisconsin, what will happen to my account?

    If you move to another state, you can still keep your money invested in your Plan account. You can also continue contributing money to your account. Before investing in a 529 plan, you should consider whether the state you or your designated beneficiary reside in or have taxable income in has a 529 plan that offers favorable state income tax or other benefits that are only available if you invest in that state's 529 plan.
  • What room and board expenses are covered?

    The beneficiary must be enrolled at least half time at an eligible post-secondary institution that leads to a recognized educational credential in order for room and board to be considered an eligible qualified higher education expense. For students living at home with parents, as well as students living in non-campus housing, the eligible educational institution's "cost of attendance" allowance for purposes of determining eligibility for federal education assistance for that year will be the room and board amount treated as a qualified higher education expense. For students living in housing owned or operated by the eligible educational institution, if the actual invoice amount charged by the eligible educational institution for room and board is higher than the "cost of attendance" figure, then the actual invoice amount may be treated as qualified room and board costs.
  • Can a HOPE Scholarship Credit or Lifetime Learning Credit for qualified tuition and other related expenses still be taken?

    A student or the student's parent may claim a Hope Scholarship Credit or Lifetime Learning Credit for certain qualified education expenses, provided that eligibility requirements for the credit are met. However, you cannot claim a credit based on the same expenses used to figure the tax-free portion of a distribution (withdrawal) from a 529 plan. You should consult the current version of IRS Publication 970, Tax Benefits for Education, for information about other tax incentives available for educational expenses.
  • Can I use the money at schools outside the US?

    Yes, 529 plan assets can be used at some accredited foreign schools. Contact your school to determine whether it qualifies as an eligible educational institution.
  • What if my child decides not to attend college?

    If the beneficiary of an account does not attend college, the account owner may name another beneficiary for the account who must be a certain member of the family of the original beneficiary (See definition of 'member of the family'). Otherwise, if the funds are withdrawn for a purpose other than to pay for qualified higher education expenses (except in the event of a beneficiary's death, disability, scholarship or attendance at a military academy), or they are treated as withdrawn (for example, if an ineligible beneficiary is named) there will be a 10% additional federal tax on the earnings, plus regular federal and state taxes. See the Disclosure Booklet for details.
  • What is a non-qualified withdrawal?

    A non-qualified withdrawal is any withdrawal that does not meet the requirements of being: (1) a qualified withdrawal; (2) a taxable withdrawal; or (3) a rollover. The earnings portion of a non-qualified withdrawal is subject to federal income taxation, and the additional 10% federal tax. Recapture provisions apply. See the Disclosure Booklet for details.
  • What happens in the event of death or disability of the beneficiary?

    If a distribution (withdrawal) is made due to the death or disability of the beneficiary, the earnings portion of such a withdrawal is subject to federal and state income tax but not to the 10% additional federal tax.
  • Will participation in Edvest affect my beneficiary's eligibility for financial aid?

    The treatment of investments in a 529 savings plan varies by school. Assets are typically treated as the account holder's assets and not the student's. (Student assets are generally assessed at 20% whereas parental assets are generally assessed at 5.6%.) Any investments, including those in 529 accounts, may affect the student's eligibility to receive financial aid based on need. You should check with the schools you are considering.
  • What if my child receives a full or partial scholarship?

    If the beneficiary receives a scholarship that covers the cost of qualified expenses, you can withdraw the funds from your account up to the amount of the scholarship without penalty or additional tax. The earnings portion of the amount withdrawn will be subject to the additional 10% federal tax to the extent the amount withdrawn exceeds the amount of the scholarship.
  • Is paying off a student loan a qualified higher education expense?

    No. Repayment of student loans is not considered a qualified higher education expense.

Beneficiaries

  • Who can be the beneficiary of an Account?

    Any U.S. citizen or resident alien, including the account holder, can be the beneficiary. The beneficiary must have a valid Social Security Number or Taxpayer Identification Number.
  • Can I change the beneficiary of my account?

    Yes, you can change your beneficiary at any time or transfer a portion of your investment to a different eligible beneficiary. The new beneficiary must be an eligible member of the previous beneficiary's family, as described in the Disclosure Booklet (PDF). Use the Change of Plan Participant/Beneficiary Form (PDF).
  • Who qualifies as member of the family?

    A "member of the family" of a beneficiary is a person related to that beneficiary as follows: (i) a son or daughter or a descendant of either; (ii) a stepson or stepdaughter; (iii) a brother, sister, stepbrother or stepsister; (iv) the father or mother or an ancestor of either; (v) a stepfather or stepmother; (vi) a son or daughter of a brother or sister; (vii) a brother or sister of the father or mother; (viii) a son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law or sister-in-law; (ix) the spouse of the beneficiary or of any of the other foregoing individuals; or (x) a first cousin of the beneficiary. For this purpose, a child includes a legally adopted child and a brother or sister includes a half-brother or half-sister.

Rollovers and Transfers

  • Can I transfer assets in a Coverdell Education Savings Account to Edvest?

    Yes, but you should discuss this with your financial advisor to determine whether there are any tax or other consequences. To do a transfer, use the Rollover Form (PDF) and complete an Account Application.
  • Can I roll over funds from another 529 plan into Edvest?

    You are permitted to transfer funds from another 529 college savings plan to an account in Edvest for the same beneficiary once within a 12-month period without incurring federal income tax. The 529 college savings plan from which you are transferring funds may be subject to differences in features, costs and surrender charges. You should consult your tax advisor or the other 529 college savings plan. State and local taxes may apply. To complete a rollover, use the Rollover Form (PDF).
  • Can assets from an UGMA/UTMA account be transferred to Edvest?

    Yes, though transferring UGMA/UTMA assets into a 529 plan account may result in a tax liability. You should discuss this with your financial advisor. UGMA/UTMA accounts cannot be opened online. To open an Edvest Plan UGMA/UTMA account, use the Custodial Account Application (PDF).


Gifting FAQ

For Account Owners
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Is there a minimum amount for gifting?

Yes, as with regular contributions, the minimum amount friends and family members may contribute (gift) to your existing account is $25.

Can family members and friends make changes to my Edvest account?

No. As the account owner, you have complete control of your account. Family members and friends can only contribute to your account. They cannot perform any other transactions. Your account remains secure.

Can family members and friends open a new Edvest account as a gift for my beneficiary?

Yes. Anyone with a Social Security Number (SSN) or federal Taxpayer Identification Number (TIN) can open an account with as little as $25 ($15 if his or her employer offers payroll deduction.) They will need to know the SSN or federal TIN of your beneficiary to complete the enrollment process. Or, they can designate themselves as the beneficiary and change the beneficiary at any time once they receive the appropriate SSN or federal TIN. They can symbolize their gift by downloading a Gift of Education Certificate and presenting it to the beneficiary.

Can my beneficiary have more than one Edvest account?

Each account can have only one account owner and one beneficiary. However, each beneficiary may have more than one account, and you may open separate accounts for as many different beneficiaries as you wish. Family members and friends may open a separate account for your beneficiary. They will need to know the Social Security Number and (SSN) or Federal Taxpayer Identification Number (TIN) of your beneficiary before they can finalize the enrollment process. Or, they can designate themselves as the beneficiary and change the beneficiary at any time once they receive the appropriate SSN or federal TIN.

Will I receive a confirmation of the gifts submitted to my Edvest account?

Yes. Account owners receive written confirmations for contributions made via check or one-time online contributions (not ACP or payroll).

Will I receive a confirmation if an account is established, or future contributions made, for my beneficiary by someone else?

No. Only the account owner will receive a confirmation statement when an account is established and funds are contributed. If a friend or family member opens an account for your child, they will need to inform you or the child about the account, and any contributions they make.

For Gift Givers
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How do I gift an Edvest account or contribute to an existing account?

You can help a child or loved one pay for the rising costs of college by opening a new Edvest account as a gift or by making a gift contribution to an existing account. To open a new account, enroll online, download enrollment materials or request an enrollment kit by mail. To contribute to an existing account, follow the instructions on our gifting page.

Is there a minimum amount for gifting?

Yes, the minimum amount you may contribute to an account is $25.00.

How will my gift contribution be invested?

Gift contributions are invested in the investment portfolio for the account chosen by the account owner. As a gift giver, you can only contribute to the account and have no control over the investment selection for the account.

Will I receive a confirmation when I open a new Edvest account as a gift?

Yes. If you open an account online you will receive both an online and written confirmation. If you mail in your enrollment materials, you will receive a confirmation in the mail.

How does the account owner know that I sent a gift?

You can symbolize your gift by presenting an Edvest gift certificate. Just download it, fill it out, and present it to your child or loved one. Account owners also receive written confirmations for contributions made via check or one-time online contributions using e- (not ACP or payroll).

Still have questions?
See the Disclosure Booklet for more details on plan requirements, contributions and withdrawals, investment portfolios, tax considerations, and rollovers and transfers.

Or call us now toll-free at 1-888-338-3789.

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