How can money in my529 Educational Savings Accounts Be Spent?

If I Put Money in a my529 Educational Savings Account, How Can It Be Spent?

By Robert Trishman, Editor, my529

Robert is the Publications Editor at my529, Utah’s educational savings plan. He previously worked at newspapers in Utah and Pennsylvania. He has degrees from Penn State and SUU. Money from 529 plans can be used at any college, university, trade, or technical school that is eligible to accept federal financial aid.

Pay for pencils? Pay for books? Pay for the ramen your student cooks?

A 529 plan is an investment vehicle designed specifically to save for qualified education expenses. my529, Utah’s official state plan, offers certain tax advantages when funds are used for those expenses and penalties when used for anything else. What is a qualified education expense? my529 can offer some answers (spoiler alert: ramen is included). The largest costs that my529 funds cover are tuition, room, and board. Money from 529 plans can be used at any college, university, trade, or technical school that is eligible to accept federal financial aid. This includes institutions in Utah, the United States, and abroad. Room and board are eligible expenses for students enrolled at least half time at one of these institutions. This includes off-campus apartments, utilities, internet access, and food if funds used do not exceed the cost of attendance set by the college. Other eligible expense categories are books and supplies. That first trip to the bookstore—to find expensive, massive textbooks for which you already have large reading assignments—can be less overwhelming with my529 funds invested ahead of time.

Computers, peripheral equipment, educational software, and internet access are also eligible expenses. Earnings on my529 investments are federal and state taxdeferred, then tax-free when spent on qualified education expenses. College costs saved for and tax advantages claimed are two reasons to begin investing for your child’s or grandchild’s future with my529. They can worry about ramen when the time comes!

Important Legal Notice

Investing is an important decision. The investments in your account may vary with market conditions and could lose value. Carefully read the Program Description in its entirety for more information and consider all investment objectives, risks, charges, and expenses before investing. For a copy of the Program Description, call 800-418-2551 or visit my529.org. Investments in my529 are not insured or guaranteed by my529, the Utah Board of Higher Education, the Utah Higher Education Assistance Authority Board of Directors, any other state or federal agency, or any third party. However, Federal Deposit Insurance Corporation (FDIC) insurance is provided for the FDIC-insured investment option. In addition, my529 offers investment options that are partially insured for the portion of the respective investment option that includes FDIC-insured accounts as an underlying investment. The state in which you or your beneficiary pay taxes or live may offer a 529 plan that provides state tax or other benefits, such as financial aid, scholarship funds, and protection from creditors not otherwise available to you by investing in my529. You should consider such benefits, if any, before investing in my529. my529 does not provide legal, financial, investment, or tax advice. You should consult your own tax or legal advisor to determine the effect of federal and state tax laws on your particular situation.