Broker Check

Update on Grandparent-owned 529 Plans You Need to Know

April 05, 2024

Say goodbye to worries about your 529 account affecting your grandchild's financial aid eligibility! Starting from the 2024-2025 school year, your Ohio 529 account won't be factored into their financial aid calculations. No more stress about diminishing their aid!

The FAFSA form for federal financial aid has had a major makeover! With fewer questions and streamlined processes, it's now easier than ever to provide income tax return information. Plus, updates in asset inclusion mean withdrawals from grandparent-owned 529 plans won't be counted against your grandchild's aid eligibility anymore!

Remember, your Ohio 529 Plan isn't just for traditional college expenses. Whether your grandchild chooses trade school, community college, or grad school, your 529 account can cover it all! Also, withdrawals are tax-free for qualified expenses.

Tax benefits: Enjoy tax-free earnings and compound interest growth on your investments. Plus, as an Ohio resident, you can deduct contributions from your taxable state income—up to $4,000 per year, per beneficiary—with unlimited carryforward.

Estate planning: Take advantage of annual gifting limits—up to $18,000 as an individual or $36,000 as a married couple per child or grandchild—without triggering federal gift tax. With the 5-year election, you can supercharge their college fund with a one-time contribution of $90,000 (for single filers) or $180,000 (for married couples) per child!

Investors should consider the investment objectives, risks, charges and expenses associated with municipal fund securities before investing. This information is found in the issuer's official statement and should be read carefully before investing.

Investors should also consider whether the investor’s or beneficiary’s home state offers any state tax or other benefits available only from that state’s 529 Plan. Any state-based benefit should be one of many appropriately weighted factors in making an investment decision. The investor should consult their financial or tax advisor before investment in any state's 529 Plan.