College Savings Plans

• What is it?
• 529 Plan

  A state-sponsored, tax-deferred college investment account.
• Education Savings Account

  An education savings account set up and managed by a parent or guardian for the benefit of a minor child.
• Custodial Account

  A brokerage account that's managed by a custodian and can be used for college or any other purpose.

• Earnings
• 529 Plan

  Tax-deferred
• Education Savings Account

  Tax-deferred
• Custodial Account

  For a child under the age of 19 considered a dependent at the end of year (or a full-time college student under the age of 24).

  
  

  Tax Years 2025 and 2026 - The first $1,350 of a child's unearned income is tax-free the next $1,350 is taxed at the child's rate. Amounts over the $2,700 threshold will be taxed at the parent's tax rate.

  
  

  View IRS Form 8814 and IRS Form 8615 for instructions.

• Gift tax contribution limits
• 529 Plan

  Tax Year 2025 – Up to $19,000 ($38,000 per couple) per beneficiary in a single year.¹
• Education Savings Account

  Tax Years 2025 and 2026 – Up to $19,000 ($38,000 per couple) per beneficiary in a single year.¹
• Custodial Account

  Tax Years 2025 and 2026 – Up to $19,000 ($38,000 per couple) per beneficiary in a single year.¹

• Withdrawals
• 529 Plan

  Free of federal income taxes when used for qualified education expenses.²
• Education Savings Account

  Free of federal income taxes when used for qualified education expenses.²
• Custodial Account

  No tax advantage.

• Rollover to a Roth IRA
• 529 Plan

  Rollover to a Roth IRA with a lifetime maximum of $35,000 per account beneficiary.
• Education Savings Account

  N/A
• Custodial Account

  N/A

• Contribution limits
• 529 Plan

  Lifetime limit for each beneficiary that varies by state. Most states set the limit in the $300,000 to $500,000 per beneficiary range, with some below and above the range.
  
• Education Savings Account

  $2,000 per year, subject to adjusted gross income limitations.³
• Custodial Account

  No limit

• Penalty for nonqualified use
• 529 Plan

  Earnings are taxed as ordinary income and may be subject to a 10% federal penalty.
• Education Savings Account

  Earnings are taxed as ordinary income and may be subject to a 10% federal penalty.
• Custodial Account

  N/A

• Investment choices
• 529 Plan

  Choose from pre-defined asset allocation portfolios.
• Education Savings Account

  Managed by a parent or guardian.
• Custodial Account

  Managed by a custodian until the account is turned over to the beneficiary (at age 18, 21, or 25, depending on the state of registration).

• Impact on financial aid
• 529 Plan

  529 plans are counted as assets of the parent or account owner in determining financial aid.
• Education Savings Account

  ESAs are counted as assets of the parent or account owner in determining financial aid.
• Custodial Account

  May significantly impact financial aid.

• Age limits
• 529 Plan

  None for beneficiaries.
• Education Savings Account

  Contributions can be made until the beneficiary reaches age 18; funds must be distributed to the beneficiary by age 30.
• Custodial Account

  Beneficiary must be under age 18.