Benefits For Indiana Taxpayers
Take advantage of Indiana tax advantages based on contributions to CollegeChoice CD! Also, contribute up to a total of $298,770 per beneficiary.
If you are an Indiana taxpayer (resident or non-resident), you are eligible for a State income tax credit for contributions to an account in CollegeChoice CD.1
The tax credit is available to an individual filing a single return or a married couple filing a joint return. The amount of the credit is the lesser of the following:
Federal 529 Plan Tax Benefits for All U.S. Residents:
- Twenty percent (20%) of the amount of the total contributions to CollegeChoice CD during the taxable year by the taxpayer;
- One thousand dollars ($1,000); or
- The amount of the taxpayer’s adjusted gross income tax liability for the taxable year reduced by the sum of all other credits allowed.
- Earnings grow tax-deferred.2
- Distributions to pay qualified education expenses are tax-free.
- Any U.S. Citizen or Resident Alien can participate and there are no income limitations.
- Participants also benefit through tax-free gifting. Contributors can make annual gifts of up to $14,000 ($28,000 for married couples making the proper election) to a beneficiary for all accounts without incurring federal gift tax. For contributions over the limit, you may treat the money (up to $70,000 single and $140,000 for married couples making the proper election) as having been made ratably over a five-year period.3
- U.S. Savings Bond owners generally may redeem bonds purchased after 1989 tax-free and contribute the proceeds in a 529 plan. IRS restrictions apply. Please see the IRS Tax Benefits for Education for current income limitations or call 888-913-2885 for more information.
- If the beneficiary does not attend a post-secondary institution, the account owner can change the beneficiary, penalty free. To avoid taxes and penalties, the new beneficiary must be a member of the family of the original beneficiary. Certain restrictions apply. Please consult your tax advisor and the CollegeChoice CD Disclosure Statement for more detailed information regarding a change in beneficiary.
- This credit may be subject to recapture from the account owner (not the contributor) in certain circumstances, such as a rollover to another state’s qualified tuition program or a non-qualified withdrawal. The credit does not apply to rollovers from another state’s qualified tuition program. See the Disclosure Statement for additional details.
- Earnings on nonqualified withdrawals are subject to federal income tax and may be subject to a 10% federal penalty tax, as well as state and local income taxes and early withdrawal penalties. The availability of tax or other benefits may be contingent on meeting other requirements.
- In the event the contributor does not survive the five-year period, a pro-rated amount will revert back to the contributor’s taxable estate.
NexBank, SSB and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.