Contributions from Grandparents, Family, and Friends

Why Is It So Hard To Talk About Saving For College?

Parents tell us they’d love to get help from their family. Grandparents say they’re waiting for their kids to ask about 529 contributions. Extended family and friends have no idea what to do or how to do it. Somebody needs to take the reins here and, like most important things, it probably needs to be the family leader. You!

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It's About Him. Her. Them.

“We were thinking about (insert child’s name) future...” For grandparents who want to initiate the college savings discussion, this sentence can be a great way to start. From there, parents will breathe a sigh of relief and the conversation about Ohio’s 529 contributions will flow easily.

Use this website to get up to speed on Ohio’s 529 Plan and why it’s the core of any serious college funding strategy. We recommend starting here, but also go back to our homepage for all the basics. We also have a list of general questions that many people have asked about Ohio’s 529 Plan.

College Grads Earn More

High School Graduate: $35,256* per year - Bachelor's Degree $59,124* per year

*Note: Data are for persons age 25 and over. Earnings are for full-time and salary workers. Based on weekly wage. Source: U.S. Bureau of Labor Statistics, Current Population Study, 2015

Tax Benefits Of Contributing To Ohio’s 529 Plan

If you’re an Ohio resident who contributes to Ohio’s 529 Plan from CollegeAdvantage, you can deduct up to $4,000 per year, per child or grandchild, from your Ohio taxes. And that number is not a contribution cap. For larger contributions, you can carry the deduction forward into future years.

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Owning The Account vs. Contributing To An Existing Account

While this is a personal decision, it’s not quite as simple as it seems – as you know, the world of college financial aid is very complex. Currently, Ohio’s 529 accounts that are owned by the parent(s) have very little effect on the beneficiary’s financial aid.

Owning Your Own Account

If you choose to own the account, you should be willing to stay actively involved in managing the funds and making investment choices. As college approaches, you may consider working with ​your grandchildren's parents or a tax advisor ​to see how you can avoid negatively affecting ​any future grants ​or financial aid.

Open An Account
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Contributing To An Existing Account

When you contribute to an existing account, it’s a very simple process. You give as little or as much as you want (within legal limits), and you can contribute right from our website or with a check. The account owner can provide their UGift® code to contribute online.

Contribute To An Account

Something Else To Consider

The ​account ​owner will ultimately decide who uses the funds. For instance, if the designated child decides not to go to college, the ​account owner can redistribute the funds to other children (including adult children) in the family or they can use the funds for their own education. They may even withdraw the funds, but they will also pay taxes and a 10% penalty on the earnings only.

While most people choose to let the parents be the ​account owner and simply have an open, honest conversation about their wishes, the option to own your own account is entirely in your hands.

Making A Large Contribution

You may make annual contributions up to $15,000 as an individual and $30,000 as a married couple to each child without triggering a federal gift tax. However, let’s say you want to really jump-start their college fund and take maximum advantage of tax-free compounding. Single filers can make a one-time $75,000 contribution and married couples can give $150,000 per child. Talk with your tax advisor if this strategy is appealing.

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How Else Could I Help Save For College?

Traditional bank and investment accounts are an option, but they’re taxed annually, reducing your total savings. With Ohio’s 529 Plan, you’ll choose from dozens of highly regarded, low-cost mutual fund investments as well as FDIC-insured bank products. Direct gifts through UTMA or UGMA accounts are another way to go, but the child will own the account once they turn 18.

529 plan benefits balancing scale
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