my529 accounts provide your client with valuable tax benefits.

Tax benefits

  • my529 account earnings grow deferred from federal and Utah state income taxes.
  • Withdrawals are exempt from federal and Utah state income taxes if your client uses them for the qualified higher education expenses, including K-12 tuition expenses, of the account beneficiary.

Estate planning and 529 plans

  • Money your client contributes to his or her my529 accounts is treated under federal gift tax rules as a completed gift to the account beneficiary.
  • The assets in your client’s account are not included as part of his or her estate, even though your client remains in control of the funds.
  • A provision of 529 plans allows your client to make a lump-sum gift of $75,000 ($150,000 if filing a joint tax return) to a beneficiary in one year without creating a taxable gift.
  • To take advantage of the gifting provision, your client will need to fill out IRS Form 709, which allows the gift to be treated as a series of five annual gifts of $15,000 ($30,000 if filing jointly).
  • Your client cannot make any additional gifts to the beneficiary during the five-year period without being subject to federal gift tax rules.

Maximum account balance

  • my529 will accept contributions to your client’s account or accounts until all account balances for the same beneficiary total $446,000.
  • The maximum aggregate of $446,000 represents the maximum estimated cost of higher education expenses for four years of college and two years of graduate school.
  • To reflect the rising cost of higher education, my529 usually adjusts the maximum aggregate amount each year.

Beneficiary change

Your client can change his or her my529 account beneficiary without any negative tax consequence if the new beneficiary is a member of the family of the prior beneficiary.

Income limits

There are no income limits to investing in a my529 account.

Utah state income tax credit or deduction

  • Your Utah clients may qualify for a Utah state income tax credit or deduction on contributions to their my529 accounts.
  • The beneficiary must be younger than 19 when designated on the account.
  • If the beneficiary is younger than age 19 when designated, the account owner can claim the credit or deduction each year a contribution is made for the life of the account.

The maximum Utah tax credit and deduction per beneficiary is reviewed each year.

Here are the allowable 2018 tax year benefits for each designated beneficiary:

Tax Filer Utah Tax Credit 2018
Maximum Qualifying Contribution
Per Beneficiary
Maximum Utah Tax Credit
Per Beneficiary
Maximum Utah Tax Deduction
Per Beneficiary
Single 5% $1,960 $98 NA
Joint 5% $3,920 $196 NA
Trusts 5% $1,960 $98 NA
Grantor Trusts
(Filing Jointly)
5% $3,920 $196 NA
Corporations NA NA NA $1,960

The my529 Professional Services Team stands ready to help you.

Phone: 888.529.1886 | Fax: 888.529.9197 |