In many cases, only one spouse actually makes the 529 plan contributions, but when the spouses consent to “gift-splitting” they are each considered as making one-half of all gifts made that year. No wiggle room. So let’s say you open a direct-sold 529 plan and an advisor-sold 529 plan sponsored by New York for your child. Therefore, you can make additional transfers of up to $5,000 each of those years and still avoid gift tax. State contribution limits range from around $200,000 on the low end to more than $500,000 on the high end per beneficiary. Use our Financial Aid Calculator to estimates the expected family contribution (EFC) and your financial need. Some states that sponsor 529 plans let you make tax-deductible contributions or receive tax credits up to certain limits.
The gift is $5,000 next year and $5,000 in each of the four subsequent years. Don’t even bother to posit a scenario where the 5-year gift tax averaging should be available on smaller contributions. Financial advisors should never recommend clients make a $75,000 529 plan contribution WITHOUT FIRST asking about other gifts during the year. newsletter to stay in the know. (See number 8 below for an example of why you might wish you could elect 5-year treatment on a lesser amount.) Unlike with 401(k) plans and other retirement savings vehicles, the IRS does not set annual contribution limits for 529 college savings plans. For distributions made after 2018, expenses for fees, books, supplies, and equipment required for the designated beneficiary’s participation in an apprenticeship program registered and certified with the Secretary of Labor under section 1 of the National Apprenticeship Act.

A student is enrolled “at least half-time” if he or she is enrolled for at least half the full-time academic work load for the course of study the student is pursuing, as determined under the standards of the school where the student is enrolled. That’s 20% of the elective amount per year. Five-year gift tax averaging is available only when contributions for the year exceed $15,000. Each year, Illinois taxpayers can deduct contributions made to Bright Start up to:1. Expenses for room and board must be incurred by students who are enrolled at least half-time (defined below). If you’ve never worked with one before, you can use our. That’s 20% of the elective amount per year. State (This doesn’t include expenses for computer software for sports, games, or hobbies unless the software is predominantly educational in nature.). At least that’s the way the law reads. You cannot contribute $50,000, for example, and elect 5-year treatment on only $30,000.
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