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During the start of this new school year, did you pay for some 529-qualified higher education expenses, such as books, mandatory fees, or the bill for your student’s internet access without first making a withdrawal from your 529 plan? Or did you cover your child’s living expenses if they live in off-campus housing, such as an apartment or fraternity/sorority directly without making a 529 withdrawal.
You can reimburse these qualified costs from your 529 college savings plan! Be sure to hold onto the receipts and bills to keep track of what you spent. Once you have a final total, request a 529 withdrawal for that amount. You can have it deposited to your bank account to compensate for the payment of the qualified expenses.
Here are the steps you will need to follow to make your 529 withdrawal.
Confirm that two-factor authentication is set up on your CollegeAdvantage Direct 529 Plan. As the name implies, you’ll need to verify your identity twice.
Log in as normal to your Ohio 529 Plan account with your user name and password from a secure device. Your phone number must be current in your online account profile. The number is necessary to set up two-factor authentication, as you will receive either an automated outbound call or a SMS text to receive your PIN (Personal Identification Number). As long as your phone numbers are current, you will either be able to receive a SMS text or an automated outbound call. Please be sure you phone service does not block system generated phone calls or texts.
If your phone number is not up to date and you cannot access you account online, our Customer Service Department is available to help from 8:30 a.m. – 6 p.m. ET Monday-Friday at 1-800-AFFORD-IT (1-800-233-6734).
Once you have the PIN, you will need to log in again within five minutes as the session is only valid for 10 minutes. If you miss that time period, you’ll need to request a new PIN. Once the PIN is entered, mark the device as trusted and the authentication process is complete. In order to keep the account secure, this process will repeat during the life of the account.
If you have more questions, visit the Two-Factor FAQ page or watch a video on the login page that describes the two-factor authentication process. As with any account questions, our Customer Service Department is available to help from 8:30 a.m. – 6 p.m. ET Monday-Friday at 1-800-AFFORD-IT (1-800-233-6734). You can also email our Customer Service Department at firstname.lastname@example.org
Update banking information
Next, verify that your home address and bank account information are correct on your account. If it’s not, update that information now. For security reasons, this information must be on file at Ohio’s 529 Plan for 15 calendar days before a withdrawal can be processed. To update your records online, select your beneficiary’s account. Then look on the left side of the screen, choose “View Profile and Document.” If you need to change your address, select “Profile” to edit your address. If you need to change bank accounts, select “Bank Information” to make the updates.
How to make an online withdrawal
After updating all your information, you will be ready to make a 529 withdrawal once you have totaled your receipts on the qualified costs you've paid out of pocket.
The fastest method to reimburse yourself is to make a withdrawal request online. Start the process by logging into your account. Next, select the beneficiary’s account from which to make a withdrawal in order to repay yourself for that beneficiary’s qualified costs. Once you’ve picked the correct account, go to the left side of the screen and scroll down to the link, “Make a withdrawal.” After that, follow the prompts to make a withdrawal.
You can have the funds sent to your bank account or have a check sent to you. Withdrawals requested before 4 p.m. ET Monday-Friday will be processed in three to five business days.
If you choose for the withdrawal to be deposited into a bank account, it will be sent electronically. It will take additional time for your banking institute to show that the deposited funds.
How to make a withdrawal with a paper form
You can mail in a Withdrawal Request Form, which will be the slowest withdrawal and payment method. To save time, fill in and then submit the form online. However, you can also print, fill out, and mail in the withdrawal request to the address found on the top of the first page of the form.
You can select to have the withdrawal mailed to your home or sent to your or your beneficiary’s bank account electronically. Again, this is will be slowest method of repaying yourself.
No matter which method you choose to make the withdrawal – whether online or by filling out paperwork - make sure to use the withdrawal funds to repay yourself for the qualified higher education expenses in the same calendar. As the account owner, you are responsible to maintain the records showing that the Direct 529 Plan withdrawals are used for qualified costs for the IRS.
Contributing to your 529 to make a withdrawal
If you want to deposit additional funds to your Ohio’s 529 Plan to pay of these upcoming qualified expenses, these new contributions must be in your account at least seven business days before those funds can be distributed and the withdrawal processsed. This and other information is covered in the Withdrawals section on page 16 of the CollegeAdvantage Direct 529 Savings Plan Offering Statement and Participation Agreement.
The most important step to take is to prepare now for upcoming 529 withdrawals. By taking action this summer, your 529 account will be set up to pay your child’s high education costs this fall. If you have any further questions, our Customer Service Department is available to help from 8:30 a.m. – 6 p.m. ET Monday-Friday at 1-800-AFFORD-IT (1-800-233-6734). Explore Ohio’s 529 Plan —The Plan That Can — at CollegeAdvantage.com.
*Please note that this is the withdrawal process for CollegeAdvantage Direct 529 plan accounts only. The withdrawal process is different for the CollegeAdvantage Guaranteed 529 Plan. Please follow this guidance to make a Guaranteed Plan withdrawal.
Posted on September 3, 2020