College Savings Gifting 101 for Grandparents

happy child with a present on white backgroundWhether it’s an extra hug, a funny family story, or that toy they’ve been longing for, somehow you always manage to give exactly what your grandchildren need. You may want to give your grandkids the ultimate gift – a college education.

This holiday season consider giving to your grandchild’s Edvest College Savings account. If he or she has an Edvest account, and you know its account number, you can contribute directly to it. (If you don’t know, ask the child’s parents to share it with you.)  You have three easy ways to make your gift this holiday season:

  • Send your gift by U.S. Mail: Complete, print and mail a gift deposit form along with your check.
  • eGift to an Edvest account: Ask your grandchild’s parents to invite you to eGift. You can then send your gift online, secure, and free!
  • Open a new Edvest account for your grandchild. While you can open an account online at com in about fifteen minutes. You can also request an enrollment kit, or download and print new account forms.

Don’t forget to download an Edvest gift certificate to symbolize your gift.

 

Legacy and planned giving options

Gifts of any size will have an impact on your grandchild’s college savings account. In fact, Edvest’s $25.00 minimum contribution helps make it one of the most affordable plans in the country.

However, if you’re thinking of making a larger contribution, consider legacy and planned giving. There’s no federal gift tax on contributions you make up to $14,000 per year if you’re a single filer, or $28,000 if you’re a married couple. You can also accelerate your gifting with a lump sum gift of $70,000 if you’re a single filer or $140,000 if you’re married and pro-rate the gift over 5 years with the federal gift tax exclusion. You can gift this amount to as many individuals or beneficiaries as you like, free from income tax. Contributions are considered a completed gift, which effectively reduces your gross estate for federal estate tax purposes. Consult your tax advisor.

 

State Tax advantages

Along with helping your grandchild succeed, you’ll enjoy some tax advantages when you contribute to an Edvest fund. While you must be a resident of the state of Wisconsin to receive any state tax benefits, your grand-child can live anywhere.

  • If you are a Wisconsin resident, your contributions may reduce your state taxable income up to $3,100 per beneficiary each year.
  • Any account earnings can grow Wisconsin (and federal) income tax-deferred.
  • Funds may be withdrawn state and federal tax-free when they are used for qualified higher education expenses at accredited colleges, universities, technical colleges, graduate schools and professional schools nationwide, including many schools abroad.

Learn more about the tax advantages of saving with Edvest on our website and by consulting your tax advisor.

 

About Edvest College Savings Plans

Edvest, Wisconsin’s official 529 college savings plan, makes it easier for families to save for higher education expenses. Funds saved through Edvest can be used at colleges, technical schools and grad schools nationwide. Plus, the funds may be used for books, supplies, or other qualified expenses – not just tuition.

Families can feel good about saving with Edvest. It was recently named one of the nation’s lowest cost plans by SavingForCollege.Com, and maintained its Bronze Rating from Morningstar in the firm’s most recent survey of 529 plans. And, with a low opening balance of $25.00, it makes saving for college more accessible for a greater number of Wisconsin families.

Consider the investment objectives, risks, charges and expenses before investing in the Edvest College Savings Plan. Please visit Edvest.com for a Plan Disclosure Booklet with this and more information. Read it carefully. Investments in the Plan are neither insured nor guaranteed and there is a risk of investment loss. TIAA-CREF Tuition Financing, Plan Manager. 

Before investing in a 529 plan, consider whether the state where your Beneficiary resides has a 529 plan that offers favorable state tax benefits that are available if you invest in that state’s 529 plan. Non-qualified withdrawals may be subject to federal and state taxes and the additional 10% federal tax.

The tax information contained herein is not intended to be used and cannot be used by any taxpayer for the purpose of avoiding tax penalties. Taxpayers should seek advice from an independent tax advisor based on their own particular circumstances. The Edvest College Savings Plan is administered by the state of Wisconsin.

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