A 529 College Savings Plan is a state-sponsored, tax-advantaged savings plan that can help families and individuals save for higher education expenses. These plans offer a number of benefits, including money saved can grow tax deferred and withdrawals are federal and state income tax free when used for qualified higher education expenses.

Funds can be used at most accredited colleges and universities in the United States and at certain colleges abroad. Qualified higher education  expenses include tuition, fees, certain room and board expenses, books, supplies and equipment required for attendance at an eligible higher education institution.

With most plans, your school choice is not affected by the state your 529 savings plan is from. So, for example, you can be a New Jersey resident, invest in a California plan and send your student to college in North Carolina.

Tax advantages of a 529 College Savings Plan

In addition to the federal tax benefits, many states offer a state income tax deduction or tax credit for contributions to their 529 College Savings Plans as well as state income tax-free withdrawals for qualified higher education expenses.

Account owners maintain control over all funds in the 529 College Savings Account. 529 College Savings Plans also offer certain gift and estate tax planning benefits. Each plan listed below offers a variety of low-cost investment options and low account minimums.

Visit a 529 College Savings Plan Site to learn more about the state 529 plans to which TIAA-CREF Tuition Financing, Inc. provides plan management services

What to do if you are not in one of these states

You don't need to be a resident of a state to enroll in that state's 529 College Savings Plan to save for college. In fact, it is sometimes beneficial to look outside, since reduced fees sometimes offset a state tax deduction. The same is true if your state has no income tax. If your state has established a 529 plan, such state may offer favorable state tax or other benefits that are available to you only if you invest in that plan. Those benefits, if any, should be one of the many appropriately weighted factors you consider before making a decision to invest in any state’s 529 college savings plan.

Looking for additional ways to save for education? Consider a Coverdell Education Savings Account or a Custodial Account.

Need Help?

TIAA-CREF can help you explore ways to save for a loved one’s college education.  Learn more.

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