#LIST OF 529 ELIGIBLE EXPENSES CODE#
#LIST OF 529 ELIGIBLE EXPENSES FREE#

Remember to review your account regularly and reconsider the contribution amount if family financial circumstances change. PA 529 makes it easy to automate your education savings with an Automatic Investment Plan or payroll deduction.Īutomatic Investment Plan – Automatic investing lets you choose to have contributions deducted automatically and regularly from a savings or checking account.Īccess your account or use the Automatic Investment Plan/Electronic Bank Transfer Form to start, change or stop automatic bank transfers or to change bank information. * Only expenses for fees, books, supplies, and equipment required for the participation of a designated beneficiary in a registered and certified apprenticeship program are considered qualified higher education expenses. Use your PA 529 account to pay for fees, books, supplies, and equipment required for the participation of a designated beneficiary in a registered and certified apprenticeship program.* Visit  to learn more. * Must be used primarily by the beneficiary during any of the years the beneficiary is enrolled at an eligible educational institution. Principal and interest on a qualified education loan for a PA 529 beneficiary or sibling up to $10,000.Required equipment, including computers*.Room and board (as specified in the college's cost of attendance must be at least a half-time student).Tuition up to $10,000 per year, per beneficiary at an elementary or secondary public, private, or religious school.Īs defined by the Internal Revenue Code, qualified higher education expenses include:.

#LIST OF 529 ELIGIBLE EXPENSES CODE#

These expenses are defined by the Internal Revenue Code to include the following: Withdrawals from your PA 529 account are tax-free when used to pay qualified education expenses. ** In the event the donor does not survive the five-year period, a prorated amount will revert to the donor's taxable estate The earnings portion of a withdrawal not used to pay for qualified expenses may be subject to federal income tax and a 10% federal penalty tax the entire withdrawal may be subject to state and local income taxes. * The availability of tax or other benefits may be contingent on meeting other requirements. So if you are both the contributor and account owner, the amount you contribute is removed from your estate but nevertheless you retain complete control over the assets – including the right to change the beneficiary or to withdraw the assets and use them for any purpose (subject to taxes and penalties).įor more information, consult your tax advisor or estate planning attorney. However, the account owner, not the beneficiary, controls the account. Depending on the relationship between the deceased account owner and the heirs, this can be a savings of up to 15% of the entire value of the account.Ĭompleted gift – One of the unique features of 529 accounts is that a contribution is considered by federal law to be a completed gift from the contributor to the beneficiary. Pennsylvania inheritance tax – Funds in the account are exempt from Pennsylvania inheritance tax. However, if you choose to take advantage of the federal gift tax averaging option mentioned above and you die within five years of contributing, a prorated portion of the contribution will be subject to estate tax.** The amount contributed is prorated over 5 years so, for example, a $30,000 contribution would use $6,000 of the current $17,000 annual gift tax exclusion each year for 5 years.įederal estate tax – If you die with money remaining in your account, it will not be included in your estate for federal estate tax purposes. Pennsylvania state income tax deduction – Pennsylvania taxpayers can deduct up to $17,000 in contributions per beneficiary per year ($34,000 if married filing jointly, assuming each spouse had income of at least $17,000) from their Pennsylvania taxable income for the purposes of determining their state income taxes.įederal gift tax – You can contribute up to $85,000 in a single year ($170,000 for a married couple filing jointly) for each beneficiary without incurring federal gift tax.

#LIST OF 529 ELIGIBLE EXPENSES FREE#

Earnings grow federal income tax-free – Earnings grow tax-deferred and are free from federal income tax when used for qualified education expenses.Įarnings grow state income tax-free – For Pennsylvania taxpayers, earnings grow tax-deferred and are free from Pennsylvania state income tax when used for qualified education expenses.

List of 529 eligible expenses