Grandparents want to see their grandchildren receive the best education possible, and many have the resources to help. If helping to save for your grandchildren’s college education is important to you, contributing to an existing CollegeAdvantage account or opening your own CollegeAdvantage account is a great way to save for college costs. A combination of control, investment flexibility, and tax benefits makes the CollegeAdvantage 529 savings plan a great way to save.

Contribute to an existing account
If you do not want to set up your own college savings account for your grandchild, you can easily contribute to an existing CollegeAdvantage account via check, with automatic recurring contributions from your bank account or online on this Web site. A contribution to your grandchild’s college savings account is a meaningful gift for birthdays, holidays or any time.

Check: Ask your son or daughter (whoever is the account owner) to give you contribution slips for the account with the investment option codes completed. Or if you have the beneficiary name and CollegeAdvantage account number, you can order contribution slips yourself.

Regular recurring EFT transfers from your bank account: Complete an EFT Authorization Form, available for download on our Forms page.   Ask the account owner for the account number and investment option codes needed to complete the form.

Online: Register for account access and provide the beneficiary’s full name, CollegeAdvantage account number and social security number. Once you have your User ID and password, you can make online contributions or sign up for EFT.

While you won’t control the assets or receive account statements by contributing to the account owned by another account owner, you can still take the $2,000 Ohio tax deduction per beneficiary if you are an Ohio taxpayer. And you can still help make college a reality for your grandchild.

Open your own CollegeAdvantage account

You keep control of your assets
Even though you name a grandchild as the beneficiary, you always control withdrawals from the account. You don’t have to worry about the money transferring to the child when the child reaches legal age (as it does with UGMA and UTMA accounts), and you can change beneficiaries to other family members if you need to.

You can invest automatically
You can make regular contributions from your bank account via electronic fund transfers (EFT), or contribute via check or online at any time. Required minimum distributions from a retirement plan account can also be automatically invested in your CollegeAdvantage account via EFT. While you will pay income taxes on the retirement plan distributions, your money will have the opportunity to continue growing tax free when the funds are used for college expenses.

You receive multiple tax benefits

• You pay no federal income taxes on your earnings while the account is invested and no federal income taxes on earnings when you withdraw the money to pay for qualified college expenses.
• If you are an Ohio taxpayer, you can deduct your contributions from Ohio taxable income. Each contributor (or married couple) can deduct up to $2,000 per beneficiary, per calendar year, with unlimited carry forward in future years. The deduction is not limited to the parents of the beneficiary. Any person contributing to a beneficiary's account is eligible to take the deduction, including grandparents. Each contributor who is an Ohio taxpayer can take the Ohio state tax deduction.
• The account also allows for a special gift tax exclusion that enables you to make up to five years’ worth of gifts (up to $65,000) in a single year to a single beneficiary ($130,000 for married couples) without triggering the federal gift tax.
• Finally, contributions to a CollegeAdvantage account may provide estate tax benefits to families whose estates exceed the estate tax exemption. Although contributions are removed from your estate for estate tax purposes, you retain control over the assets, a tax benefit unique to 529 plans.

Contributions to 529 college savings plans are generally treated as gifts to the beneficiary for federal gift tax purposes, including generation-skipping transfer taxes, and are subject to an annual federal gift tax exclusion amount ($13,000 for 2009). Contributors to 529 college savings plans may elect to treat contributions in excess of that amount (up to $65,000 for 2010) as prorated over 5 years. Election is made by filing a federal gift tax return. While contributions are generally excludable from contributor’s gross estate, if electing contributor dies during 5-year period, amounts allocable to years after death are includable in contributor’s gross estate. Consult your tax advisor.