529 College Savings Plan

529 College Savings Plan  

Overview

Simply put, a 529 college savings plan is a smart way to help meet the rising costs of education and Massachusetts residents can now make qualified withdrawals for K-12. 529 college savings plans offer significant tax benefits and an exceptional degree of control and flexibility. What's more, 529 plans can be used for virtually any public or private institution of higher education in the United States and even many abroad.
 

The Scholars Choice 529 college savings plan can help your family save for college, graduate school, vocational and private schools.
 

By investing in this Plan, your investments will grow tax-deferred, and withdrawals used for qualified educational expenses are not subject to federal income tax. In addition, you maintain ownership and control how the money is used. 529 plans offer an exceptional array of tax benefits, flexibility, and control.

Enrollment

Start saving for your family today.

 

You are invited to a Zoom webinar.

Topic: Baystate Health Scholars Choice 529 Information Session
 

When: Nov 13, 2019 12:00 PM Eastern Time (US and Canada)

Register in advance for this webinar!
 

When: Nov 21, 2019 12:00 PM Eastern Time (US and Canada)

Register in advance for this webinar!
 

After registering, you will receive a confirmation email containing information about joining the webinar.

Tell Me More

Highlights:

  • A way to for families to save for education
  • Available to investors nationwide
  • Proceeds can be used for any accredited college or private school
  • An investment account with tax advantages
  • Cost-effective employer-sponsored plan investment options

 

The Scholar’s Choice 529 savings plan offers you exceptional benefits in saving for higher education needs:

  • Flexibility Anyone can contribute to 529 plans –Parents, Grandparents, Uncles, Aunts, etc. You can use your funds from the Plan at any accredited in-state, out-of-state, or international institution.
  • Federal Tax The contributions are after-tax (not deductible for income tax purposes). The investment grows tax free and withdrawals are tax free if utilized for the beneficiary’s accredited educational programs.
  • High contribution limits Maximum limits are in excess of $400,000. Enables the accumulation of enough assets to cover the entire cost of college.
  • Low maintenance Provides a hands-off way to save for college.
  • Control The individual, not the beneficiary, has control over how the money is used.
  • Estate Planning 529 plan assets are excluded from one’s estate and not subject to estate taxes. Individuals can contribute up to $15,000 ($30,000 for married couples) per beneficiary without incurring federal gift tax.
  • No Load Program The Plan uses special Employer-Sponsored investment options with no sales charges.
Contact Us

 Phone
For enrollment assistance and account administration inquiries, please contact: Legg Mason
1-888-572-4652
 Phone
For investments and advice, please contact: Streetlight Financial
1-413-848-6020

FAQs

Answers about the program, including eligibility options, enrollment, coaching and more.
  • What is a 529 plan?

    A plan operated by a state or educational institution, with tax advantages and potentially other incentives to make it easier to save for college and other post-secondary training for a designated beneficiary, such as a child or grandchild.
  • What is the main advantage of a typical 529 plan?

    Earnings are not subject to federal tax and generally not subject to state tax when used for the qualified education expenses of the designated beneficiary, such as tuition, fees, books, as well as room and board. Contributions to a 529 plan, however, are not deductible.
  • Who is eligible?

    All Baystate and Baycare employees can participate. Team members can work directly with the plan provider to establish payment systems through their personal bank account.
  • When can I enroll?

    You can enroll in this benefit anytime during the year.
  • What is new with 529 plans?

    A qualified, nontaxable distribution from a 529 plan now includes the cost of the purchase of any computer technology, related equipment and/or related services such as Internet access. The technology, equipment or services qualify if they are used by the beneficiary of the plan and the beneficiary's family during any of the years the beneficiary is enrolled at an eligible educational institution.
  • What does "computer technology or equipment" mean?

    This means any computer and related peripheral equipment. Related peripheral equipment is defined as any auxiliary machine (whether on-line or off-line) which is designed to be placed under the control of the central processing unit of a computer, such as a printer. This does not include equipment of a kind used primarily for amusement or entertainment. “Computer technology” also includes computer software used for educational purposes.
  • Is this "cost of the purchase of any computer technology or equipment or Internet access and related services" available for any other education benefit under the tax laws?

    No, it is only for 529 plan withdrawals. Such costs are generally not qualifying expenses for the American opportunity credit, Hope credit, lifetime learning credit or the tuition and fees deduction.
  • How long have 529 plans been around?

    Congress created them in 1996 and they are named after section 529 of the Internal Revenue code. “Qualified tuition program” is the legal name.
  • Can anyone set up a 529 plan?

    Yes. You can set one up and name anyone as a beneficiary — a relative, a friend, even yourself. There are no income restrictions on either you, as the contributor, or the beneficiary. There is also no limit to the number of plans you set up.
  • Are there contribution limits?

    Yes. Contributions cannot exceed the amount necessary to provide for the qualified education expenses of the beneficiary. If you contribute to a 529 plan, however, be aware that there may be gift tax consequences if your contributions, plus any other gifts, to a particular beneficiary exceed $15,000 during the year. For information on a special rule that applies to contributions to 529 plans, see the instructions for Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return.

  • Am I restricted to my own state’s 529 plan?

    No. Your state’s 529 plan may offer incentives to win your business. But you are allowed to contribute to any state’s 529 plan and still be eligible for all Federal income tax advantages.
  • Who controls the funds in a 529 plan?

    Whoever purchases the 529 plan is the custodian and controls the funds until they are withdrawn.
  • Each 529 plan account has one designated beneficiary. What does that mean?

    A designated beneficiary is usually the student or future student for whom the plan is intended to provide benefits. The beneficiary is generally not limited to attending schools in the state that sponsors their 529 plan. But to be sure, check with a plan before setting up an account.

  • Can I change the beneficiary of a 529 plan I have set up?

    Yes. There are no tax consequences if you change the designated beneficiary to another member of the family. Also, any funds distributed from a 529 plan are not taxable if rolled over to another plan for the benefit of the same beneficiary or for the benefit of a member of the beneficiary’s family. So, for example, you can roll funds from the 529 for one of your children into a sibling’s plan without penalty.

  • What happens to the funds if the beneficiary doesn’t go to college?

    The beneficiary can be changed to anyone including the donor. If there is no use for the funds for any beneficiary on an accredited program, funds can be withdrawn and all of the earnings are then taxable. Since the contributions were taxed on the front end, only the earnings will be taxable.

  • I have not set up a 529 plan for my child. Can I start one now and take advantage of this new computer benefit?

    You can start one anytime. But the benefit of a 529 plan comes with the tax-free withdrawal of earnings that build up in the plan based on the contributions made. Like other types of savings accounts, earnings are usually a function of time. A 529 plan which is set up while the student is already enrolled in college or in other postsecondary education may not accrue enough earnings to be of immediate benefit. However, that doesn’t mean that such a student wouldn’t benefit from a 529 plan as his or her postsecondary education continues.

  • What happens to the account if I leave Baystate?

    If you leave Baystate, your account will stay in place and you will continue to have access to the institutional pricing. You will continue to make contributions to the plan on an individual basis.

  • Where can I find more information about 529 plans?

    A good source is IRS Publication 970, Tax Benefits for Education.

     

    For additional questions, please contact:
    Aaron Smith
    Financial Planner
    Streetlight
    8 Main St
    Florence, MA 01062
    413-848-6020 Office
    413-335-2716 Cell
    aaron.smith@streetlightfinancial.com

 

An investor should consider the Program’s investment objectives, risks, charges and expenses before investing. The Program Disclosure Statement at scholars-choice.com/PDS, which contains more information, should be read carefully before investing. If an investor and/or an investor’s beneficiary are not Colorado taxpayers, they should consider before investing whether their home states offer 529 plans that provide state tax and other benefits such as financial aid, scholarship funds, and protection from creditors that are only available to state taxpayers investing in such plans.Investments in the Scholars Choice College Savings Program are not insured by the FDIC or any other government agency and are not deposits or other obligations of any depository institution. Investments are not guaranteed by the State of Colorado, CollegeInvest, QS Investors, LLC, Legg Mason Investor Services, LLC, or Legg Mason, Inc. or its affiliates and are subject to investment risks, including loss of principal amount invested.Legg Mason, Inc., its affiliates, and its employees are not in the business of providing tax or legal advice to taxpayers. These materials and any tax-related statements are not intended or written to be used, and cannot be used or relied upon, by any such taxpayer for the purpose of avoiding tax penalties or complying with any applicable tax laws or regulations. Tax-related statements, if any, may have been written in connection with the “promotion or marketing” of the transaction(s) or matter(s) addressed by these materials, to the extent allowed by applicable law. Any such taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor.Scholars Choice is a registered service mark of CollegeInvest. CollegeInvest and the CollegeInvest logo are registered trademarks. Administered and issued by CollegeInvest, State of Colorado. QS Investors, LLC is the Investment Manager and Legg Mason Investor Services, LLC is the primary distributor of interests in the Program; together they serve as Manager of the Program. QS Investors, LLC, ClearBridge Investments, LLC, Brandywine Global Investment Management, LLC, Western Asset Management Company, and Legg Mason Investor Services, LLC are Legg Mason, Inc. affiliates. Thornburg Investment Management, Inc. and Templeton Global Advisors Limited are not affiliated with Legg Mason, Inc.