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Frequently Asked Questions
General FAQs
What is CollegeAdvantage?
CollegeAdvantage is Ohio’s 529 college savings program designed to help individuals and families save for college in a tax-advantaged way. The Ohio Tuition Trust Authority, a state agency within the Office of the Chancellor of the Ohio Department of Higher Education, sponsors and manages the program. CollegeAdvantage is offered as two plans: the CollegeAdvantage Direct 529 Savings Plan provides a do-it-yourself approach, while the CollegeAdvantage Advisor 529 Savings Plan offered by BlackRock must be opened through a professional financial advisor. Both plans offer advantages including: tax-free earnings,1 diverse investment options, and professionally managed funds. The Ohio Tuition Trust Authority also manages the CollegeAdvantage Guaranteed 529 Savings Plan, which remains closed since December 31, 2003, to new enrollments and contributions.
How does CollegeAdvantage work?
When you open an account in the CollegeAdvantage Direct Plan, you can choose to invest in Ready-Made, Age-Based Portfolios, Ready-Made, Risk-Based Portfolios or one or more other individual investment options based upon your investing preferences, savings goals, and risk tolerance. The choices are yours. The CollegeAdvantage Advisor Plan offers a variety of investment options that you and your financial advisor choose to achieve your college savings goals. All of the contributions made to your account grow tax-free and withdrawals are free from federal and state tax if used for qualified higher education expenses. In addition, State of Ohio taxpayers can deduct contributions up to $4,000 from their Ohio taxable income per beneficiary, per year, with unlimited carryforward of contributions over that amount.
How do I open a CollegeAdvantage account?
The easiest way to open a CollegeAdvantage Direct Plan account is to enroll online at CollegeAdvantage.com. It only takes about 10 minutes. If you prefer to enroll by mail, complete the Account Application form. To open a CollegeAdvantage Advisor Plan account, contact a financial advisor.
How much do I need to open an account?
CollegeAdvantage offers low initial and subsequent minimum contributions of as little as $25. The Fifth Third Certificate of Deposit requires a $500 minimum contribution.
Who can open a CollegeAdvantage account?
Any U.S. citizen or resident alien, 18 or older, with a Social Security number or Tax Identification Number and U.S. street address, can open an account, regardless of income level. Parents, grandparents, other family, and friends can open an account for anyone they choose. You do not have to be related to the beneficiary of your account. You can also open an account to pay for your own higher education. Certain trusts and entities may also open an account.
Who can contribute to a 529?
Anyone2 can contribute to the same CollegeAdvantage account, but total contributions cannot exceed the Account Contribution Limit (see the Plan Offering Statement for the most current limit) for all CollegeAdvantage accounts for the same beneficiary. A contributor who is an Ohio taxpayer, even if they are not the Account Owner, may take the deduction from Ohio taxable income for the contributions they make to a CollegeAdvantage account up to the $4,000 deduction limit.
Who can be a beneficiary?
Any U.S. citizen or resident alien of any age with a Social Security Number can be named as the beneficiary of a CollegeAdvantage account. As the Account Owner, you can designate a child, adult, or even yourself as the beneficiary.
Does my beneficiary have to attend college in Ohio?
No. You can use the assets in your account toward the costs of nearly any public or private, 2-year or 4-year college nationwide, as long as the student is enrolled in a U.S.-accredited college, university, graduate school, or technical school that is eligible to participate in U.S. Department of Education student financial aid programs. In fact, many U.S. colleges and universities now have campuses or locations outside of the country, where money from your account can also be used. A school is eligible if they have a Federal School Code, which can be searched at www.fafsa.gov.
What if my beneficiary does not go to college immediately after high school?
CollegeAdvantage does not require a child to attend college immediately after graduating high school. There are no age restrictions on when you can use your account to pay for college expenses.
Are investments in CollegeAdvantage guaranteed?
Only contributions to and earnings on the Bank Options are insured by the FDIC, up to certain limits. No other investments are insured or guaranteed by CollegeAdvantage or any other entity. Investment returns will vary depending upon the performance of the investment options you choose. The Account Owner bears all risk, including the risk of loss of all investments.
What is Ugift®?
Ugift is an innovative way to invite family and friends to save for college by celebrating occasions, achievements, and events with gift contributions to your CollegeAdvantage Direct Plan account. To utilize Ugift, log in to your Direct Plan account.
What is Upromise® and how can it help me save for college?
Boost your college savings with Upromise®
Upromise® is a free service that helps families save for college. Upromise provides unique opportunities for members to earn cash back rewards for everyday activities such as shopping, dining and more. Rewards are automatically deposited as contributions to your Ohio's 529 Plan, CollegeAdvantage, when you reach $50 in rewards.
Join Upromise for free today:
- Earn $5.29 in bonus rewards when you open a new Upromise account.
- Earn an additional $25 in bonus rewards when you link your first Ohio's 529 Plan account to your new Upromise account.
- Earn additional rewards continuously by shopping online through Upromise.com and dining at over 10,000 restaurants nationwide.
- You’re automatically entered into the monthly Upromise 529 Scholarship drawing of five $529 scholarships.
Disclosure
Upromise is an optional program offered by Upromise, LLC, is separate from the Ohio's 529 Plan, CollegeAdvantage, and is not affiliated with the Ohio's 529 Plan. Separate terms and conditions apply to the Upromise program, and you will be required to read and agree to them at sign-up. Participating companies, contribution levels, and terms and conditions are subject to change at any time without notice. Transfers from Upromise to an Ohio's 529 Plan, CollegeAdvantage account are subject to a $50 minimum.
Upromise and the Upromise logo are registered service marks of Upromise, LLC.
What impact does a 529 plan have on eligibility for federal financial aid?
529 plan assets are counted at different rates for the Expected Family Contribution (EFC) in the FAFSA formula. Current federal guidelines are as follows:
If the student is a dependent, a 529 plan account is considered as the parent's asset (if the Account Owner is the parent or the dependent student). As a result, it will generally be counted at a rate of only 5.64% of its value for the EFC.
If the student is not a dependent and is the Account Owner, the 529 plan account is treated as the student's asset and is generally factored into the EFC at the higher rate of 20%.
In other cases, the account does not count as an asset for federal financial aid purposes. However, a student may have to report distributions received from the account as income for these purposes.
Note: Financial aid programs offered by educational institutions and other non-federal sources may have their own guidelines for the treatment of 529 plan accounts. For complete information about financial aid eligibility, you should consult with a financial aid professional and/or the state or educational institution offering a particular financial aid program, since rules and regulations often change.
Footnotes: General
1 Earnings on non-qualified withdrawals are subject to federal income tax and may be subject to a 10% federal penalty tax, as well as state and local income taxes. The availability of tax or other benefits may be contingent on meeting other requirements.
2 If you contribute to an account owned by someone else, you give up all rights to the money contributed to that account.
Tax FAQs
How do I access tax forms and other account documents?
In addition to your 1099Q tax form, you can also download account statements and confirmations of account activity online. Simply log in, and within two clicks, you can select the documents you need. Watch this short video for all the details.
What tax benefits can I get from CollegeAdvantage?
Earnings grow tax free from federal and state income tax when used for qualified higher education expenses.1 Qualified higher education expenses include tuition, mandatory fees, books, supplies, and equipment required for enrollment or attendance; certain room and board costs during any academic period the beneficiary is enrolled at least half-time; certain expenses for a special-needs student; and withdrawals up to $10,000 per student, per year, for K-12 tuition at a public, private, or religious elementary or secondary schools.
Are there any special tax benefits for Ohio taxpayers?
Yes. If you are an Ohio taxpayer, you are eligible to deduct up to $4,000 of contributions per beneficiary, per year from your State of Ohio taxable income, with unlimited carryforward. You do not have to be the Account Owner to deduct contributions from your State of Ohio taxable income. The benefit is per contributor or married couple.
What are the Plan's gift- and estate-tax benefits?
Per federal 529 laws, individuals can invest up to $18,000 ($36,000 for married couples) per beneficiary without incurring any federal gift-tax consequences. You can also contribute up to $90,000 per beneficiary in a single year ($180,000 for married couples) and take advantage of five years' worth of tax-free gifts at one time. (Contributions are considered completed gifts and are removed from your estate,2 but you, as the Account Owner, retain control.) Upon the death of the Account Owner, money remaining in the account will not be included in the Account Owner's estate for federal estate tax purposes. For more information, consult your tax advisor or estate-planning attorney.
Footnotes: Taxes
1 Earnings on non-qualified withdrawals are subject to federal income tax and may be subject to a 10% federal penalty tax, as well as state and local income taxes. The availability of tax or other benefits may be contingent on meeting other requirements. See the Plan's Offering Statement and Participation Agreement for more details on qualified expenses.
2 In the event the donor does not survive the five-year period, a pro-rated amount will revert to the donor's taxable estate.
Account FAQs
How can I make contributions to my account?
Electronic Bank Transfer from your checking or savings account
Automatic Investment Plan (AIP) with scheduled recurring contributions
Payroll deduction through participating employers
Check (made payable to the Ohio Tuition Trust Authority)
Rollover from another 529 plan
Rollover from a Coverdell Education Savings Account or a qualified Series EE or Series I U.S. Savings Bond
Exchange from a different CollegeAdvantage Plan
Transfer of cash from an UGMA/UTMA account (Consult with a tax advisor regarding tax consequences)
Ugift® - a way to invite family and friends to give the gift of education
Upromise® - grow your savings even more by linking your CollegeAdvantage Direct Plan to your Upromise account and automatically transferring your Upromise earnings into your CollegeAdvantage Direct Plan (available for the Direct Plan only)
Do I retain control of the account?
Yes. As the Account Owner, you choose your investment options, and you decide when and where the money will be used.
Can I make an investment change in my account?
Yes. You can change the direction of your future contributions at any time. For existing investments, federal 529 law permits you to exchange the assets in your CollegeAdvantage account to a different mix of investment options twice per calendar year.
How can I use the money in my account?
The money in your CollegeAdvantage account can be used for any purpose. However, to qualify for federal tax-free withdrawals on earnings and avoid penalties, the money must be used for qualified higher education expenses for the beneficiary at an eligible educational institution. 1, 2
Can I change the beneficiary of my account?
Yes. You can transfer your account to a "member of the family" 3 of the beneficiary without incurring federal income tax or penalties.
To change a beneficiary, complete the Beneficiary Change Form.
What counts as a qualified higher education expense?
Eligible expenses include tuition, mandatory fees, computer equipment and related technology and services, books, supplies, and equipment required for enrollment or attendance; room and board costs during any academic period the beneficiary is enrolled at least half-time; and certain expenses for a special-needs student.
Account owners can also choose to use 529 assets to pay K-12 tuition up to $10,000 per student, per year, for enrollment at public, private, or religious elementary or secondary school. If there are multiple accounts for a student, the combined 529 distributions to pay for their K-12 tuition is limited to $10,000 per year. Consult your qualified tax advisor for specific information.
The Further Consolidated Appropriations Act 2020 includes provisions that 1) allow 529 withdrawals to pay for certain expenses associated with apprenticeship programs registered and certified by the Secretary of Labor under the National Apprenticeship Act, and 2) to pay principal and interest on certain qualified education loans for the beneficiary of your account or any of the beneficiary’s siblings.The loan repayment provisions apply to repayments up to $10,000 per individual. This $10,000 is a lifetime amount, not an annual limit. Withdrawals for student loan repayment and/or apprenticeships can only be made to the Account Owner or the Beneficiary.
What if I receive a refund from my child’s school?
If you receive a refund of funds originally withdrawn from your 529 account, you may re-contribute the funds (up to the amount of the refund) within 60 days after the date of the refund without penalty.
The re-contribution must be made by check, not electronically.
Pursuant to recent changes in federal law, which are retroactively effective January 1, 2015 a beneficiary who receives a refund of any qualified higher education expenses from an eligible educational institution may re-contribute funds originally withdrawn from your Account, up to the refunded amount within 60 days after the date of the refund without penalty. A transition rule contained in the federal law permits any such refund received after December 31, 2014 and before December 18, 2015 to be re-contributed at any time through February 16, 2016.
The individual making the re-contribution is responsible for maintaining all documentation linking the re-contribution to the refund from the eligible educational institution. Without such documentation, the original withdrawal may be considered a non-qualified withdrawal by the IRS. You should consult your tax advisor regarding the tax implications (including but not limited to income, gift and generation-skipping taxes) of any refunds and/or re-contributions and any related documentation that you should maintain.
Re-contributions cannot be made to the CollegeAdvantage Guaranteed Plan. If you wish to make a re-contribution, you must direct the re-contribution to an open account in another qualified 529 plan.
Is paying off a student loan a qualified higher education expense?
A provision of the Further Consolidated Appropriations Act 2020 allows for 529 withdrawals to pay principal and interest on certain qualified education loans for the beneficiary of your account or any of the beneficiary’s siblings. The loan repayment provisions apply to repayments up to $10,000 per individual. This $10,000 is a lifetime amount, not an annual limit. Withdrawals for student loan repayment and/or apprenticeships can only be made to the Account Owner or the Beneficiary.
What if my beneficiary decides not to go to college?
CollegeAdvantage does not require a child to attend college immediately after graduating high school. There are no age restrictions on when you can use your account to pay for college expenses. You also have the option of changing the beneficiary to another “member of the family”3 or taking a non-qualified withdrawal.
How do I access tax forms and other account documents?
In addition to your 1099Q tax form, you can also download account statements and confirmations of account activity online. Simply log in, and within two clicks, you can select the documents you need. Watch this short video for all the details.
Footnotes: Using the assets in my CollegeAdvantage account
1 Earnings on non-qualified withdrawals are subject to federal income tax and may be subject to a 10% federal penalty tax, as well as state and local income taxes. The availability of tax or other benefits may be contingent on meeting other requirements.
2 An eligible school is one that is eligible to participate in federal financial aid programs.
3 Section 529 defines a family member as: a son, daughter, stepson or stepdaughter, or a descendant of any such person; a brother, sister, stepbrother, or stepsister; the father or mother, or an ancestor of either; a stepfather or stepmother; a son or daughter of a brother or sister; a brother or sister of the father or mother; a son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law; the spouse of the Beneficiary or the spouse of any individual described above; or a first cousin of the Beneficiary. Gift or generation-skipping transfer taxes may apply. Please consult with your tax advisor for further information.
How do I close my account?
In order to close your Direct Plan Account with CollegeAdvantage, you must liquidate/withdraw the remaining balance in the account you wish to close. The account must be at a zero balance in order to close your account. There are two means in which to close and liquidate your account: 1) complete the Direct Withdrawal Request Form asking for 100% liquidation and to close the account or 2) via your online account access requesting 100% liquidation and to close your account. It is important that if you want the account closed that not only to liquidate the entire balance, but to choose the close option as well. Otherwise, the account will remain open with a $0 balance.
Ugift FAQs
What is Ugift?
A service that lets Ohio’s 529 Plan account owners make it simple for others to add to a student’s account. It’s used by millions of people nationwide.
What’s a Ugift code?
Every account in Ohio’s 529 Plan has a unique Ugift code. You can access yours (1) on our website when you log in to your account and click “Share Ugift code” or (2) when you sign in to the READYSAVE 529 App and select the Ugift icon at the bottom of the start screen.
What do I do with my Ugift code(s)?
Ugift codes are for sharing with family and friends who want to give the gift of education
Is sharing my Ugift code safe?
Absolutely. It’s a unique, one-way code that has nothing to do with your account number. Money can go in with the code, but money and/or personal information can’t go out.
Can I email or text a Ugift code?
Easily. From the website, right-click the code graphic and drop it in an email or text. Whoever gets it can just click on the link and go straight to the Ugift site: ugift529.com. From the READYSAVE 529 App, it’s even simpler — just follow the prompts.
How about gift registries — can I post my Ugift code?
People love doing this. Share your code(s) and ugift529.com. Gift givers will appreciate the simplicity and can even set up a Ugift account to make future gifts.
What happens when someone gives us a gift?
If you’re the account owner, you’ll automatically be notified.
Is there a fee for using it?
It’s free.
Who operates Ugift?
Ugift is provided by Ascensus to participating 529 Plans all over the country. Ascensus is a leading financial services firm in the 529 Plan universe and has been an important partner to Ohio’s 529 Plan for many years.