Why 529
Be smart about your 529.
Indiana529 Advisor can help your savings go farther when it's time to pay for education . It also makes it easy to change your contributions, your investments, even your beneficiary. So if your circumstances change, your education savings can, too. Plus, you and your financial professional always benefit from the investment expertise of some of the country's most respected asset managers.
Plan Benefits
Tax Advantages
Savings grow tax-deferred, and Indiana residents may be eligible for a state tax credit.1
Flexibility
Savings can be used for many types of education and qualified expenses.
Professional Investment Management
21 different portfolios to choose from, offered by some of the world's most trusted asset managers.
Tax Advantages
Powerful tax benefits
With an Indiana529 Advisor account, you have access to powerful tax benefits many non-529 accounts don't.
Tax-free Withdrawals
Distributions for qualified higher-education expenses are free from federal and Indiana state income tax.1
Estate tax advantages
Contribute as much as $18,000 per child each year ($36,000 if married filing jointly), without incurring gift-tax consequences. Or opt for a special election that allows you to treat a $90,000 contribution ($180,000 if married filing jointly) as if it was made over a five-year period.2
Indiana State Tax credit
Indiana taxpayers are eligible for a state income tax credit of 20% of contributions to an Indiana529 Advisor account, up to $1,500 per year.3
1 Earnings on non-qualified withdrawals may be subject to federal income tax and a 10% federal penalty tax, as well as state and local income taxes. Tax and other benefits are contingent on meeting other requirements and certain other withdrawals are subject to federal, state, and local taxes.
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.
3 This credit may be subject to recapture from the account owner (not the contributor) in certain circumstances, such as rollovers to another state's 529 plan, federal non-qualified withdrawals, withdrawals used to pay elementary or secondary school tuition for a school outside of Indiana, qualified education loan repayments, or rollovers to a Roth IRA account, as described in the Disclosure Booklet.
Frequently asked questions.
No. Assets in an Indiana529 Advisor account can be used at any eligible school in the country and abroad. That includes 2- and 4-year colleges, graduate schools, and vocational/technical schools.
Not every child goes to college, and that's okay! If the beneficiary decides not to attend higher education, you have a few options.
- Stay invested. You can leave the money in the account in case the beneficiary decides to attend school later.
- Change the beneficiary. You can change the beneficiary on the account as long as the new one is an eligible member of the family of the former beneficiary.3
- Withdraw the money or roll it into another type of account, such as a Roth IRA.1 This option will have tax consequences, so please see the Disclosure Booklet or consult a tax professional for guidance.
If you are an Indiana taxpayer (resident or not-resident, married or individual), you may be eligible for a state income tax credit of 20% of contributions to an Indiana529 Advisor account, up to $1,500 per year. This also extends to friends and family who contribute to the account.2
1 Effective January 1, 2024, 529 account owners will be able to rollover savings from their 529 plan account into a Roth IRA without incurring any federal income tax or penalty. The Roth IRA must belong to the same beneficiary, and the lifetime rollover limit is $35,000. To be eligible, the 529 account must have been open for at least 15 years and the rollover amount must have been in the 529 account for 5 years.
529 to Roth IRA rollovers will also count toward annual Roth IRA contribution limits, but Roth IRA income limits do not apply for this type of contribution. For more information, please read the Program Description.
2 Indiana taxpayers are eligible for a state income tax credit of 20% of contributions to an Indiana529 Advisor account, up to $1,500 per year. This credit may be subject to recapture from the account owner (not the contributor) in certain circumstances, such as rollovers to another state's 529 plan, federal non-qualified withdrawals, withdrawals used to pay elementary or secondary school tuition for a school outside of Indiana, qualified education loan repayments, or rollovers to a Roth IRA account, as described in the Disclosure Booklet.
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.
