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Top 10 Questions
Qualified higher education expenses include tuition, fees, and the cost of books, supplies, and equipment required for the enrollment and attendance of the Beneficiary at an eligible educational institution and certain room and board expenses. Computers and related technology such as internet access fees, software or printers are also qualified education expenses when used primarily by the beneficiary when enrolled at an eligible educational institution. Qualified higher education expenses also include certain additional enrollment and attendance costs of a beneficiary who is a special needs beneficiary in connection with the beneficiary’s enrollment or attendance at an eligible institution. For this purpose, an eligible educational institution generally includes accredited post-secondary educational institutions offering credit toward a bachelor’s degree, an associate’s degree, a graduate-level degree or professional degree, or another recognized post-secondary credential.
In addition, up to $10,000 annually per student, in aggregate from all 529 plans, can be withdrawn if used for tuition expenses at a public, private or religious elementary, middle, or high school.
Any individual with a Social Security number or federal Taxpayer Identification Number who is a U.S. citizen or resident alien can open an account and contribute to a Connecticut Higher Education Trust (CHET) account on behalf of any beneficiary. An organization described in Section 501(c)(3) of the Internal Revenue Code, an estate or a trust may also open an account. Such entities will be subject to additional restrictions or administrative requirements and may not open an account online or participate in e-Delivery. You can even open an account for yourself. Open an account today.
If you wish to have contributions automatically taken from your paycheck you’ll first need to check for program availability with your employer and then submit the proper forms by mail.
CHET performance for the 14 Investment Options is available online. Go to Investment Performance.
Contributions to a Connecticut Higher Education Trust (CHET) account may help you reduce the taxable value of your estate. Contributions to the Plan, together with all other gifts from the account owner to the beneficiary, may qualify for an annual federal gift tax exclusion of $15,000 per donor ($30,000 for married contributors), per beneficiary. If an account owner’s contribution to a Plan account for a beneficiary in a single year exceeds $15,000 ($30,000 for married contributors), the account owner may elect to treat up to $75,000 of the contributions, or $150,000 for joint filers, as having been made over a period of up to five years for federal gift tax exclusion. Consult your tax advisor.
Federal: When you contribute to CHET, any account earnings can grow federal and Connecticut income tax-free until withdrawn. Plus, distributions used to pay for qualified higher education expenses will be free from federal and Connecticut income tax. Non-qualified withdrawals may be subject to federal and state taxes and the additional federal 10% tax.
State: In addition to federal tax benefits, there are state tax benefits as well. For CHET, tax treatment is as follows:
Contributions are deductible for Connecticut income tax purposes up to $5,000 per year for a single return or $10,000 per year for a joint return. If you exceed this amount, you can carry over the excess amount for the five taxable years following the deduction. An incoming rollover from another qualified tuition program does not qualify as a contribution for income tax purposes.
Earnings accrue free of Connecticut income tax. While qualified withdrawals are not subject to Connecticut income tax, non-qualified and federally taxable withdrawals are included in income and subject to the tax. Connecticut tax benefits related to CHET are available only to Connecticut tax payers. You should talk to a qualified advisor about how Connecticut tax provisions affect your circumstances.
CHET, Connecticut’s direct-sold college savings plan, offers a choice of 14 Investment Options. These options vary in their investment strategy and degree of risk, allowing you to select an option or combination of options that may fit your needs. To see the list of Investment Options, brief descriptions and associated fees and expenses, visit Investment Options. For more information on the risks involved in investing in such Investment Options, and the type of investor for whom each Investment Option may be appropriate, read the Disclosure Booklet (PDF).
Yes, you may also be eligible for a Connecticut income tax deduction. The amount contributed by a Connecticut taxpayer to CHET accounts during a tax year is deductible from Connecticut adjusted gross income in an amount not to exceed $5,000 for a single return or $10,000 for a joint return for that tax year. Connecticut taxpayers may deduct from their Connecticut adjusted gross income contributions made to one or more CHET Accounts during the tax year up to these annual contribution deduction limits: (1) $5,000 for an individual who is single, head of household, or married/civil union filing separately; and (2) $10,000 for an individual who is married/civil union filing jointly, or qualifying widow(er) with dependent child. If you exceed this amount, you can carry over the excess amount for the five taxable years following the deduction. These limits apply on an aggregate basis (not a per beneficiary basis) to all contributions made to all CHET Accounts during the tax year. Connecticut taxpayers may not claim a deduction for a rollover into a CHET account from a non-CHET account or for a transfer into a CHET account from a Coverdell education savings account.
With CHET, Connecticut’s direct-sold plan, there are no sales charges, start-up or maintenance fees. To review the current total annual asset-based fees, which are comprised of the underlying investments expenses for each Investment Option, the Plan Manager fee, and state administration fee, please see fees and expenses.
No. The money in your account may be used at any eligible educational institution. This includes public and private colleges and universities, graduate and post-graduate schools, community colleges, and certain proprietary and vocational schools. In addition, up to $10,000 annually per student, in aggregate from all 529 plans, can be withdrawn if used for tuition expenses at a public, private or religious elementary, middle, or high school.
About 529 Plans
A “member of the family” of a beneficiary is a person related to that beneficiary as follows: (i) a son or daughter or a descendant of either; (ii) a stepson or stepdaughter; (iii) a brother, sister, stepbrother or stepsister; (iv) the father or mother or an ancestor of either; (v) a stepfather or stepmother; (vi) a son or daughter of a brother or sister; (vii) a brother or sister of the father or mother; (viii) a son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law or sister-in-law; (ix) the spouse of the beneficiary or of any of the other foregoing individuals; or (x) a first cousin of the beneficiary. For this purpose, a child includes a legally adopted child and a brother or sister includes a half-brother or half-sister.
With the Connecticut Higher Education Trust (CHET) you can change the designated beneficiary at any time. So assuming none of your children will be attending college during the same years, it’s possible to use the same plan for multiple beneficiaries.
However, you might want to open an account for each child. Since it only takes $25 dollars and 15 minutes to open, and CHET offers simple, all-in-one age-based investments, many parents find it easier to track and manage multiple accounts.
Money set aside in a 529 plan actually has less of an impact on financial aid than some other savings methods. That is because 529 assets are typically treated as the account holder’s (i.e. parent’s) and not the student’s. Every school has a formula for how they calculate the “Expected Family Contribution” (EFC). In general, in EFC calculations, parent assets are assessed at approximately 5% whereas student assets are generally assessed at 20%. Meaning only 5% of parent assets are assumed to go towards how much a family should pay for college, yet a full 20% of the child’s assets are assumed to go towards college. Bottom line, 529 savings have less of an impact when figuring financial aid, than assets owned by the child (for example a custodial (UGMA/UTMA) account).
For more information, please click here.
If you move to another state, you can still keep your money invested in your Plan account. You can also continue contributing money to your account. Before investing in a 529 plan, you should consider whether the state you or your designated beneficiary reside in or have taxable income in has a 529 plan that offers favorable state income tax or other benefits that are only available if you invest in that state’s 529 plan.
No. The money in your account may be used at any eligible educational institution. This includes public and private colleges and universities, graduate and post-graduate schools, community colleges, and certain proprietary and vocational schools. In addition, up to $10,000 annually per student, in aggregate from all 529 plans, can be withdrawn if used for tuition expenses at a public, private or religious elementary, middle, or high school.
Check out our interactive comparison tool.
TIAA-CREF Tuition Financing, Inc. (TFI) is the plan manager. TFI is a subsidiary of TIAA. TIAA is a full-service financial services group of companies that has dedicated itself to helping those in the academic, medical, cultural, and research fields for over 90 years. Our clear and long-held commitment to serving the financial best interests of those who serve the benefit and enlightenment of others has never and will never change.
If the beneficiary of an account does not attend college, the account owner may name another beneficiary for the account who must be a certain member of the family of the original beneficiary (See definition of “member of the family”). Otherwise, if the funds are withdrawn for a purpose other than to pay for qualified higher education expenses (except in the event of a beneficiary’s death, disability, scholarship or attendance at a military academy), or they are treated as withdrawn (for example, if an ineligible beneficiary is named) there will be a 10% additional federal tax on the earnings, plus regular federal and state taxes. See the Plan Information and Details section for more info.
No. You may, for example, live in Michigan and have a Plan in Connecticut. If you move out-of-state, you have the option to keep your plan in the state you moved from.
However, keep in mind each state’s plan includes tax advantages only available to residents of that state. By not participating in the plan for the state where you’re a resident, you will not be eligible for those tax incentives. You can always rollover your current 529 plan into another state’s 529 account.
If the beneficiary receives a scholarship that covers the cost of qualified expenses, you can withdraw the funds from your account up to the amount of the scholarship without penalty or additional tax. The earnings portion of the amount withdrawn will be subject to the additional 10% federal tax to the extent the amount withdrawn exceeds the amount of the scholarship. Please consult with a qualified tax advisor or consultant.
Just as a 401(k) plan is for retirement savings, a 529 plan is for college savings. 529 refers to Section 529 of the Internal Revenue Code. By federal law, all 529 college savings plans generally must be state sponsored. Residents of any state can invest in any state’s 529 plan; you do not need to be a resident of a particular state to invest in that state’s plan. However, there may be tax advantages available only to state residents for any particular state-sponsored plan. There are several types of 529 plans, including state-sponsored college savings plans and state-sponsored prepaid plans. With all 529 plans—both savings, and prepaid—there is no income limit for participation. You can even open an account for yourself. Visit our interactive comparison tool to compare features and benefits of these plans.
To compare features of 529 plans and custodial accounts, use our interactive comparison tool.
Contact your school to determine if it qualifies as an eligible educational institution or use the Federal School Code Search on the Free Application for Federal Student Aid (FAFSA) website.
529 plans vary in a number of ways, including contribution limits to the account (defined by the states), fees to open and maintain an account, in-state tax treatments such as a state tax deduction, investment options offered, and the financial services company that manages the plan. There may also be other differences, such as special programs or benefits defined by the particular plan. Before investing in a 529 plan, you should consider whether the state you or your designated beneficiary reside in or have taxable income in has a 529 plan that offers favorable state income tax or other benefits that are only available if you invest in that state’s 529 plan.
Yes, 529 Plan assets can be used at some accredited foreign schools. Contact your school to determine if it qualifies as an eligible educational institution.
With the Connecticut Higher Education Trust (CHET) you can change the designated beneficiary at any time. So assuming none of your children will be attending college during the same years, it’s possible to use the same plan for multiple beneficiaries.
However, you might want to open an account for each child. Since it only takes $25 dollars and 15 minutes to open, and CHET offers simple, all-in-one age-based investments, many parents find it easier to track and manage multiple accounts.
Account Management
As part of the guidelines set forth by the IRS, there can only be one account owner for 529 accounts, but you can designate a contingent account owner in the event of your death.
If you’ve already opened a 529 account but you’ve forgotten your password, you may reset it by clicking this link and following the instructions.
To reset your password, login into your account through this link and follow the instructions.
If you open an account online, you’ll be automatically set up with online access. If you enroll by mail, you’ll need to set up an account separately.
To do so, click Log In from the homepage of your Connecticut Higher Education Trust (CHET) account, select Set Up Access from the drop down menu, and Register under new user.
Be sure to you have your Social Security Number and Date of Birth. Create a Username. Create a Password, set up your security questions, your eDelivery options and you’re done.
If you’d like to receive your account statements and/or Plan disclosure electronically, click here to adjust your e-Delivery options.
You have online access to your account information 24 hours a day, or you can call and speak to one of our college-savings specialists at 1-888-799-2438 (English) or 1-888-802-4717 (español), Monday through Friday, 8:00 am - 8:00 pm Eastern Time. You’ll receive quarterly and annual statements that show account activity. A separate confirmation statement will also be mailed, which lists every transaction made to the account. (Quarterly statements will be provided for periodic payment plans, such as payroll deduction.) Log in to your account.
No. As the account owner, you have complete control of your account. Family members and friends can only contribute to your account. They cannot perform any other transactions. Your account remains secure.
To update your account information, including payment information, login here.
No. Only the account owner will receive a confirmation statement when an account is established and funds are contributed. If a friend or family member opens an account for your child, they will need to inform you or the child about the account, and any contributions they make.
Account ownership cannot be shared.
Only the current account owner may
access account information, and there
can only be one owner per account.
If you want control over the Connecticut Higher Education Trust (CHET) account you’re making
contributions to, opening a new account only takes $25
and 15 minutes.
Account Opening
You can open an account with as little as $25.
Any individual with a Social Security number or federal Taxpayer Identification Number who is a U.S. citizen or resident alien can open an account and contribute to a Connecticut Higher Education Trust (CHET) account on behalf of any beneficiary. An organization described in Section 501(c)(3) of the Internal Revenue Code, an estate or a trust may also open an account. Such entities will be subject to additional restrictions or administrative requirements and may not open an account online or participate in e-Delivery. You can even open an account for yourself. Open an account today.
With CHET, Connecticut’s direct-sold plan, there are no sales charges, start-up or maintenance fees. To review the current total annual asset-based fees, which are comprised of the underlying investments expenses for each Investment Option, the Plan Manager fee, and state administration fee, please see fees and expenses.
You can Enroll Online and submit your initial contribution electronically from your bank account or establish an Automatic Contribution Plan. You can also Download Enrollment Materials, or you can Request an Enrollment Kit to have enrollment materials mailed to your address. Allow five to seven days for delivery.
Beneficiaries
If a distribution (withdrawal) is made due to the death or disability of the beneficiary, the earnings portion of such a withdrawal is subject to federal income tax but not to the 10% additional federal tax.
Any U.S. citizen or resident, including the account holder, can be the beneficiary. The beneficiary must have a valid Social Security Number or Taxpayer Identification Number.
Yes, you can change your beneficiary at any time or transfer a portion of your investment to a different eligible beneficiary. The new beneficiary must be an eligible member of the previous beneficiary’s family. Change your beneficiary.
Each account can have only one account owner and one beneficiary. However, each beneficiary may have more than one account, and you may open separate accounts for as many different beneficiaries as you wish. Family members and friends may open a separate account for your beneficiary. They will need to know the Social Security Number and (SSN) or Federal Taxpayer Identification Number (TIN) of your beneficiary before they can finalize the enrollment process. Or, they can designate themselves as the beneficiary and change the beneficiary at any time once they receive the appropriate SSN or federal TIN.
Contributions
Whether you choose to open an
account or contribute to an existing 529
plan really depends on your
circumstances. With a 529 plan, the
account owner controls the funds and
account information, including the
designated beneficiary.
So if you’re the person who primarily
funds the college savings, you may want
to open an account. That way, you can change the
investment options, beneficiary, and
more.
Otherwise, it might be easier to
contribute to an existing 529 plan.
Just keep in mind the owner of that
account has the right to change the
beneficiary and controls how the funds
get used.
Contributions to a CHET account are always made after-tax regardless of the method in which an account owner is contributing to the account.
No, contributions to Connecticut Higher Education Trust (CHET) or any 529 plan are not deductible for federal income tax purposes.
You can open an account by check, through the automatic contribution plan, by electronic funds transfer (including electronic purchase option), or through a transfer of funds between accounts or a rollover. The minimum contribution required to open an account is $25 per investment portfolio. The minimum amount for subsequent contributions is also $25 per investment portfolio. For payroll deductions, the minimum contribution is $15 per investment portfolio per pay period. Each account can have only one account owner and one beneficiary. However, each beneficiary may have more than one account and, you may open separate accounts for as many different beneficiaries as you wish. Find out how to contribute.
There is no annual limit on the amount you may contribute. However, there is an overall maximum account balance limit of $300,000 which applies to all accounts opened for a beneficiary. An account owner may contribute to a beneficiary’s account if, at the time of the contribution, the total balance of all accounts for that beneficiary does not exceed $300,000. Accounts that have reached the maximum account balance limit may continue to accrue earnings.
The yearly contribution tax deadline is 12/31.
While $25 dollar is the minimum
contribution for gift givers and owner
contributions (or $15 through payroll
deduction), the answer to this question
depends on your life situation,
investment horizon, and goals.
Generally, you want to save as much as
you can. The more you can save the less
dependent you’ll be on loans and other
forms of financial aid.
Gifting
Gift contributions are invested in the investment option for the account chosen by the Account Owner. As a gift giver, you can only contribute to the account and have no control over the investment selection for the account.
Yes, as with regular contributions, the minimum amount friends and family members may contribute (gift) to your existing account is $25.
You can symbolize your gift by presenting a Connecticut Higher Education Trust (CHET) gift certificate. Just download it, fill it out, and present it to your child or loved one. Account owners also receive written confirmations for contributions made via check or one-time online contributions.
Federal: When you contribute to CHET, any account earnings can grow federal and Connecticut income tax-free until withdrawn. Plus, distributions used to pay for qualified higher education expenses will be free from federal and Connecticut income tax. Non-qualified withdrawals may be subject to federal and state taxes and the additional federal 10% tax.
State: In addition to federal tax benefits, there are state tax benefits as well. For CHET, tax treatment is as follows:
Contributions are deductible for Connecticut income tax purposes up to $5,000 per year for a single return or $10,000 per year for a joint return. If you exceed this amount, you can carry over the excess amount for the five taxable years following the deduction. An incoming rollover from another qualified tuition program does not qualify as a contribution for income tax purposes.
Earnings accrue free of Connecticut income tax. While qualified withdrawals are not subject to Connecticut income tax, non-qualified and federally taxable withdrawals are included in income and subject to the tax. Connecticut tax benefits related to CHET are available only to Connecticut tax payers. You should talk to a qualified advisor about how Connecticut tax provisions affect your circumstances.
Yes. Account owners receive written confirmations for contributions made via check or one-time online contributions (not ACP or payroll).
Yes. If you open an account online you will receive both an online and written confirmation. If you mail in your enrollment materials, you will receive a confirmation in the mail.
Yes. Anyone with a Social Security Number (SSN) or federal Taxpayer Identification Number (TIN) can open an account with as little as $25 ($15 if his or her employer offers payroll deduction.) They will need to know the SSN or federal TIN of your beneficiary to complete the enrollment process. Or, they can designate themselves as the beneficiary and change the beneficiary at any time once they receive the appropriate SSN or federal TIN. They can symbolize their gift by downloading a Gift of Education Certificate and presenting it to the beneficiary.
You can help a child or loved one pay for the rising costs of college by opening a new Connecticut Higher Education Trust (CHET) account as a gift or by making a gift contribution to an existing account. To open a new account, enroll online, download enrollment materials or request an enrollment kit by mail. To contribute to an existing account, follow the instructions on our gifting page.
You may invite family and friends to make gift contributions by creating and sending out a gift invitation.
Investments
Most states offer two types of college-savings
plans: a low-cost plan sold
directly by the state and a financial
advisor-sold plan. This version may
include upfront commissions on the
amount invested and higher annual
asset-based expenses. The lower
expenses of a direct-sold plan could
mean more of your money will go
toward building your college fund.
Another factor for consideration:
residents within states offering 529 tax
benefits may wish to calculate the
potential savings of investing in the
state 529 plan versus an out-of-state
plan.
The answer to this question will depend on various factors, including your life situation, investment horizon, risk tolerance, and goals. Taking our Risk Tolerance Assessment is a good way to begin.
Yes. Each time you make a contribution you may select any one of the 14 Investment Options. Once invested in a particular investment option, contributions and any earnings may be transferred to another investment option only twice per calendar year or upon a transfer of funds to a Plan account for a different eligible beneficiary (see the Plan Disclosure Booklet for more information). Use the Rebalance Form.
You may choose among the 14 Plan Investment Options, but not the underlying mutual funds or other investment vehicles to which funds in the investment option may be allocated. Under federal law, an account owner may not have direct or indirect control over the investments in a 529 Plan. See the Plan Disclosure Booklet for a list of underlying funds.
CHET, Connecticut’s direct-sold college savings plan, offers a choice of 14 Investment Options. These options vary in their investment strategy and degree of risk, allowing you to select an option or combination of options that may fit your needs. To see the list of Investment Options, brief descriptions and associated fees and expenses, visit Investment Options. For more information on the risks involved in investing in such Investment Options, and the type of investor for whom each Investment Option may be appropriate, read the Disclosure Booklet (PDF).
CHET performance for the 14 Investment Options is available online. Go to Investment Performance.
You can view the historical performance behind CHET investments.
Yes, you can view the underlying funds for our Age-Based Portfolio Options and Multi-Fund Portfolio Options by visiting these pages and clicking the "View Underlying Mutual Funds" link associated with each allocation.
Payroll Deductions
If you wish to have contributions automatically taken from your paycheck you’ll first need to check for program availability with your employer and then submit the proper forms by mail.
Taxes
Transfer of funds or a change in beneficiary is subject to the Generation Skipping Tax (GST) if the new beneficiary is two or more generations below the prior beneficiary. If transfer is subject to GST, tax is imposed on the prior beneficiary. Account owners should consult their own tax advisors for guidance when considering a change of beneficiary or a transfer to another account.
A non-qualified withdrawal is any withdrawal that does not meet the requirements of being: (1) a qualified withdrawal; (2) a taxable withdrawal; or (3) a rollover. The earnings portion of a non-qualified withdrawal is subject to federal income taxation and the additional 10% federal tax. See the Disclosure Booklet for details.
If you are taking a withdrawal to pay for qualified higher education expenses of the beneficiary, there will be no federal or Connecticut income tax. Find out how to make a withdrawal.
Yes, you may also be eligible for a Connecticut income tax deduction. The amount contributed by a Connecticut taxpayer to CHET accounts during a tax year is deductible from Connecticut adjusted gross income in an amount not to exceed $5,000 for a single return or $10,000 for a joint return for that tax year. Connecticut taxpayers may deduct from their Connecticut adjusted gross income contributions made to one or more CHET Accounts during the tax year up to these annual contribution deduction limits: (1) $5,000 for an individual who is single, head of household, or married/civil union filing separately; and (2) $10,000 for an individual who is married/civil union filing jointly, or qualifying widow(er) with dependent child. If you exceed this amount, you can carry over the excess amount for the five taxable years following the deduction. These limits apply on an aggregate basis (not a per beneficiary basis) to all contributions made to all CHET Accounts during the tax year. Connecticut taxpayers may not claim a deduction for a rollover into a CHET account from a non-CHET account or for a transfer into a CHET account from a Coverdell education savings account.
Contributions to a Connecticut Higher Education Trust (CHET) account may help you reduce the taxable value of your estate. Contributions to the Plan, together with all other gifts from the account owner to the beneficiary, may qualify for an annual federal gift tax exclusion of $15,000 per donor ($30,000 for married contributors), per beneficiary. If an account owner’s contribution to a Plan account for a beneficiary in a single year exceeds $15,000 ($30,000 for married contributors), the account owner may elect to treat up to $75,000 of the contributions, or $150,000 for joint filers, as having been made over a period of up to five years for federal gift tax exclusion. Consult your tax advisor.
Transfers
With the Connecticut Higher Education Trust (CHET), you may transfer account ownership at any time. Please note, this assignment is an irrevocable action where you transfer all rights, title, and interest in the account to another owner. You will no longer have access or control of any part of the account.
Keep in mind this process is distinct from changing beneficiaries, where you’re changing who can receive the account funds, or rebalancing your funds where you’re changing one or more of your investments.
Yes, though transferring UGMA/UTMA assets into a 529 plan account may result in a tax liability. You should discuss this with your financial advisor. UGMA/UTMA accounts cannot be opened online. Get the Custodial Application or the Additional Contribution by Mail form.
You are permitted to transfer funds from another 529 college savings plan to an account in Connecticut Higher Education Trust (CHET) for the same beneficiary once within a 12-month period without incurring federal income tax. The 529 college savings plan from which you are transferring funds may be subject to differences in features, costs and surrender charges. You should consult your tax advisor or the other 529 college savings plan. State and local taxes may apply. How to Manage an Incoming Rollover from another 529 Account.
Yes, but you should discuss this with your financial advisor to determine whether there are any tax or other consequences. How to redeem proceeds from a Coverdell ESA or Qualified US Savings Bond.
Withdrawals
No. Repayment of student loans is not considered a qualified higher education expense.
Yes – funds may be redeposited to your 529 plan within 60 days without penalty should a student need to withdraw from a class. The recontributed amount cannot exceed the amount of the refund.
Computers and related technology such as internet access fees, software or printers are also qualified education expenses. The student must be the primary user of the equipment.
Qualified higher education expenses include tuition, fees, and the cost of books, supplies, and equipment required for the enrollment and attendance of the Beneficiary at an eligible educational institution and certain room and board expenses. Computers and related technology such as internet access fees, software or printers are also qualified education expenses when used primarily by the beneficiary when enrolled at an eligible educational institution. Qualified higher education expenses also include certain additional enrollment and attendance costs of a beneficiary who is a special needs beneficiary in connection with the beneficiary’s enrollment or attendance at an eligible institution. For this purpose, an eligible educational institution generally includes accredited post-secondary educational institutions offering credit toward a bachelor’s degree, an associate’s degree, a graduate-level degree or professional degree, or another recognized post-secondary credential.
In addition, up to $10,000 annually per student, in aggregate from all 529 plans, can be withdrawn if used for tuition expenses at a public, private or religious elementary, middle, or high school.
When you want to withdraw money (take a distribution) from your account, you may request a withdrawal from your account online that will be sent via Automated Clearing House* to your bank account, typically within 3 business days, as long as your banking information has been on file for at least 30 days and your address has not changed within the last 30 days. You may also request a withdrawal by using the Withdrawal Form (PDF). This form can be used for withdrawals for qualified higher education expenses of your beneficiary, non-qualified withdrawals, or withdrawals due to death, disability or scholarship. Allow 7-10 days for mail and processing time. Note: Non-qualified withdrawals will be subject to federal and Connecticut income taxes and a 10% additional federal tax. Keep your receipts.
*Automated Clearing House payments may take several days to be deposited into your bank account.
Yes. However, you must apply the distributions to different eligible expenses in order to obtain the favorable tax treatment. See IRS Publication 970 for more detail or consult your tax advisor.
A non-qualified withdrawal is any withdrawal that does not meet the requirements of being: (1) a qualified withdrawal; (2) a taxable withdrawal; or (3) a rollover. The earnings portion of a non-qualified withdrawal is subject to federal income taxation, and the additional 10% federal tax. Recapture provisions apply. See the Plan Information and Details section for more info.
The beneficiary must be enrolled at least half time at an eligible post-secondary institution that leads to a recognized educational credential in order for room and board to be considered an eligible qualified higher education expense. For students living at home with parents, as well as students living in non-campus housing, the eligible educational institution’s “cost of attendance” allowance for purposes of determining eligibility for federal education assistance for that year will be the room and board amount treated as a qualified higher education expense. For students living in housing owned or operated by the eligible educational institution, if the actual invoice amount charged by the eligible educational institution for room and board is higher than the “cost of attendance” figure, then the actual invoice amount may be treated as qualified room and board costs.
Taxable withdrawals are withdrawals due to the beneficiary’s death, the permanent disability of the beneficiary, the beneficiary’s receipt of a scholarship award or certain other tax-free amounts, or the beneficiary’s attendance at a military academy. A taxable withdrawal will be subject to applicable federal income tax on earnings, if any, but will not be subject to the 10% additional federal tax on earnings (the “Additional Tax”).
CHET money withdraws tax-free to qualifying higher education institutions. This is defined as any institution that can accept federal funding and is accredited through the U.S. Dept. of Education. This definition covers the vast majority of both public and private postsecondary institutions across the United States and a number of institutions outside the U.S. It includes associate’s, bachelor’s, master’s, graduate, doctoral and professional degree programs and many trade, technical and vocational schools as well.
To view check details online, log into your account and hover over ‘Transactions’ which is located across the top of the screen. Select the ‘Transaction Activity’ link. On the following page select the ‘Transaction History’ tab. From the ‘Transaction Type’ dropdown, select Withdrawal. After locating the withdrawal, please click on the ‘Check Details’ link which is located the ‘Transaction Type’ section. The Check Details will provide you with the date the check was issued, who it was payable to, the address it was mailed to, the check number, amount of the check and the status. If the status is Unpaid, then the check has not been cashed. If the status is Paid, then the status date will show approximately when the check was cashed.
Qualified Higher Education Expenses may include tuition, certain room and board expenses in addition to any fees, books, supplies and equipment required for enrollment and attendance at an Eligible Education Institution. Computers and related technology such as internet access fees, software or printers are also qualified education expenses. The student must be the primary user of the equipment.
If the beneficiary is a special needs student, any additional costs required for enrollment or attendance to meet those needs will also be covered.
About Room and Board Expenses
Room & board costs are considered qualified only during the academic period in which the student is enrolled or accepted for enrollment in a program that leads to a recognized educational credential. This amount cannot exceed the institution’s ‘cost of attendance’ allowance.
Online Access
Unfortunately, if you are having difficulty with both your username and password, you cannot retrieve this information via the website. For assistance with accessing your account, please contact our operations area at 1-888-799-2438 from 8:00 AM to 8:00 PM ET Monday through Friday, excluding holidays. They can assist you with accessing your account.
If you’ve forgotten your username, you can retrieve it by clicking this link. You will need to enter your password and other information.
If you’ve forgotten your password, you may reset it by clicking this link. You will need to enter your Username, and then click on the "Forgot / Reset password?" link, and follow the instructions.
We have enhanced the log in security protocol by adding a one-time security code that is sent to your email or mobile phone(via text). The Security Profile page is used to set up one or more delivery methods (email address or mobile phone number) to receive the log in security code. You may need to enter your account number, social security number and other personal information to set up your delivery methods.
To log in you will enter your Username and Password, select a delivery method, and request that the security code be sent. When you receive the security code you will enter and verify it to complete the log in process and access your accounts. Please note that if you receive security codes via email you may need to check your Junk or Spam folder for the email and indicate that the security code email is not Junk/Spam.
If your account has been locked please contact our operations area at 1-888-799-2438 from 8:00 AM to 8:00 PM ET Monday through Friday, excluding holidays. They can assist you with unlocking your account. We apologize for the inconvenience.
To change your password, login into your account through this link and follow the instructions.
Cyber Security
Yes. Establishing a personal user ID and creating a strong password only you know, plus TFI’s website security protocols, provides multilayered security for your account. Further, once logged in to your college savings plan account, key personally identifiable information (PII) is not displayed on your 529 account page. For example, no account owner or beneficiary Social Security numbers or dates of birth appear. With secure sign on, you can change and update your password as frequently as you like.
TFI recommends that all account owners set up online access to their 529 plan account(s). Benefits of managing your account online include:
- SAFE and SECURE – Customized user IDs and passwords help secure your account and protect your information. Personal information is more vulnerable to theft when on paper and physically moving through the postal system.
- FAST – Online transactions can be processed in real time, much faster than waiting for forms to reach the plan’s administrative staff.
- EASY – Step-by-step, clear instructions are available to help guide you through the transaction process.
- 24/7 MONITORING – You can access your account balances and pending transactions 24/7; no need to wait for paper confirmations/statements.
- ENVIRONMENTALLY FRIENDLY – View your quarterly statements online and cut down on paper usage.
TFI takes customer security very seriously and consistently reviews and updates security protocols to protect and ensure the confidentiality of account owner data. The TFI security framework is made up of multiple technologies and processes designed to protect the integrity and confidentiality of our systems, our proprietary information and your information.
It is important to be vigilant and protect your personally identifiable information (PII).
One way to prevent fraud is by never emailing or mailing your personal or financial information to someone (or some company) you don’t know, and by not writing down passwords or using passwords that are easy to guess like birthdays and names of family members. If you ever feel uncomfortable or curious about questions from a service representative – for example, from your credit card company – a financial services firm or any service provider, don’t hesitate to ask questions and clarify with the representative what is required.
Beware of phishing scams. Phishing scams typically involve an email, text message or phone call in an attempt to obtain personally identifiable information which may be used to access financial accounts. The sender may begin with a request for help and ask for specific information like credit card numbers, Social Security numbers, user IDs and passwords, etc. They might also try to convince you to click a link that installs malicious software or to make a wire transfer. Never provide this information unless you are sure the requestor is legitimate. Also, never reply to or click on links within an email that ask for personal or financial information.
Be cautious with social networking sites. Social network profiles are often public, and criminals use search engines to research their victims. They try to establish trust and convince unsuspecting individuals that they are legitimate contacts. It’s important to create strong and unique passwords for each social network account.
The Federal Trade Commission provides important tips to safeguard your information, either online or in paper form, on its website section on Privacy, Identity Theft and Online Security. You can access the FTC website here.
It is very important that you not only safeguard your personal information, but that you also monitor your financial accounts for unusual activity. Please immediately report to your financial provider any activity that you have not authorized.
Other
A student or the student’s parent may claim a Hope Scholarship Credit or Lifetime Learning Credit for certain qualified education expenses, provided that eligibility requirements for the credit are met. However, you cannot claim a credit based on the same expenses used to figure the tax-free portion of a distribution (withdrawal) from a 529 plan. You should consult the current version of IRS Publication 970, Tax Benefits for Education, for information about other tax incentives available for educational expenses.
Since in most states minors don’t have the right to contract — and therefore cannot own stocks, bonds, mutual funds, annuities, or insurance policies. The Uniform Gifts to Minors Act and Uniform Transfer to Minors Act are ways for minors to own those securities without an attorney needing to set up a special trust fund.
You can find lots more information about scholarships, loans, and other forms of financial aid here.
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