What your clients need to know
Set your sights on any school in the country.
Proceeds from a Putnam 529 for America account can be used at any eligible college or certified apprenticeship program. Proceeds may be used to pay for tuition, fees, room and board, books, and other qualified expenses. In addition, up to $10,000 per student per year may be used to pay tuition at any public, private, or religious elementary or secondary school. A lifetime amount of $10,000 can be used to pay back student loans.
Tax advantages for education and estate planning
Account owners pay no federal income taxes on account earnings while the account is invested. And owners will pay no federal income taxes when the money is withdrawn to pay for qualified higher education expenses. In certain cases, contributions to the account can be removed from the owner's estate for tax purposes, yet they can retain control over the assets. For 2023, the gifting limit per beneficiary is $17,000 annually for individuals and $34,000 for married couples.
A special provision of 529 plans allows contributions equal to five years' worth of gifts to a single beneficiary in a single year without triggering the federal gift tax. The maximum amount of contributions eligible for the 5-year election for individuals/married couples is $85,000/$170,000 for 2023.
Control of assets stay with the owner
Even when the child reaches legal age, the account owner controls the account and retains control over withdrawals for the life of the account. This benefit is not offered by non-529 education savings accounts such as UGMAs and UTMAs, which transfer assets when the child reaches legal age.
Major flexibility with Putnam 529 for America
Since offering one of the first advisor-sold 529 savings plans in the country over two decades ago, Putnam Investments has been helping families across America build their futures. Putnam's expertise in 529 plan administration is combined with our industry-recognized customer service and over 85 years of investing experience.
- Low minimum to invest
- Maximum account balance of $500,000
- No income, age, or time limits on contributions or withdrawals
Change in plans?
If a child decides not to attend college, the account owner can switch the account to another family member. Owners may change the beneficiary as many times as they wish to another member of their family, as defined by the IRS. Account owners have three options if a child decides not to attend college:
- Leave the assets invested in the plan for later use
- Change the beneficiary to another family member
- Withdraw the assets and pay a 10% additional tax