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Along with our age-based investment options, Ohio’s 529 Plan, CollegeAdvantage, offers age-based savings strategies for parents who want to select their own 529 investment options. No matter how old your child is, Ohio’s 529 Plan has guidance on what to do at this current stage of their life. It’s never too early and never too late to save for their higher education. In this last article of a six-part series, Ohio’s 529 Plan shares recommendations on what steps you can take after your child graduates from college.
And congratulations, your child has finished their higher education! You’ve done a great job shepherding them to the new chapter of their lives.
If there are any funds left in the 529 plan, you have some options. The 529 account can be used to pay for your child’s continuing education — whether it’s graduate, law, or medical school, or other certification. You can also choose to transfer the remaining 529 funds to another member of the family, anyone related by blood, marriage, or adoption. A family member includes you as the parent if you would like to use the account to go back to college to complete a degree or pursue additional professional certification. As your Ohio 529 plan doesn’t have an expiration date, you can even keep building the account for your future grandchildren.
If there’s no one else who could use the college savings fund, you can close out the account during the year in which you made your last withdrawal to cover your child’s qualified higher education expense. Please keep in mind the IRS requires the withdrawal to occur during the same calendar year as the qualified higher educational expense is incurred. Fill in the Direct Withdrawal Request Form or make the request online asking for 100% liquidation as well as to close the account.
You can select who will receive that payment, whether you as the Account Owner or your student as the Beneficiary, perhaps as a graduation present. Keep in mind, as a non-qualified withdrawal, there will be a 10% federal tax penalty applied on the earnings. Whoever receives that payment will also pay federal, state, and local tax on the earnings portion only of the withdrawal to close the account.
Thank you for trusting Ohio’s 529 plan with your college savings. If you have any additional questions about closing your account, our Customer Service Department is open from 8:30 a.m. - 6 p.m. Monday- Friday. You can reach them at 1-800-AFFORD IT or 1-800-233-6734. Be sure to visit the blog section of CollegeAdvantage.com to explore for more college savings information.
Posted on November 19, 2018