Account Maintenance FAQs
Contributions
Who can contribute to an account?
Anyone can contribute to an account.
How much can I contribute to the account?
You may continue to make contributions to an account for a designated beneficiary so long as the aggregate balance of all Section 529 savings plan accounts for the same designated beneficiary under all Section 529 savings plans sponsored by the State of Nevada does not exceed the Maximum Contribution Limit, which is currently $370,000. Accounts that have reached the Maximum Contribution Limit will continue to accrue earnings, although future contributions may not be made to such accounts. The Maximum Contribution Limit is based on the aggregate market value of the account(s) for a designated beneficiary, and not on the aggregate contributions made to the account(s). Note: The Board expects to evaluate the Maximum Contribution Limit annually, but reserves the right to make adjustments more or less frequently.
How can contributions be made to the account?
- Electronic funds transfer (opening contribution minimum $15, subsequent contribution minimum $50) from your checking or savings account
- Automatic investment plan* (opening and subsequent contributions minimum of $50) with scheduled contributions in set amounts from your checking or savings account
- Payroll deduction (of $15 or more per pay period) through participating employers*
- Check made payable to SSGA Upromise 529 (opening contribution minimum $15, subsequent contribution minimum $50)
- Rollover from another 529 plan
- Rollover from an Education Savings Account or a qualified Series EE or Series I U.S. Savings Bond
- Transfer from an UGMA/UTMA account
- Ugift (minimum of $15)
- Upromise rewards when linked to SSGA Upromise 529, on a periodic basis will automatically transfer funds (minimum of $25)
The Plan will not accept contributions made with cash, traveler's checks, money orders, starter checks, bank courtesy checks, credit cards, credit card checks, instant loan checks, third-party personal checks over $10,000, foreign checks, checks dated more than 180 days before the Plan receives it, postdated checks, checks with unclear instructions, other checks the Plan deems unacceptable, stocks, securities, or other non-bank account assets.
If I choose to mail a check, when will my contribution be invested in the Plan?
Generally, your contribution will be processed on the same day, if received before 4 p.m., Eastern Time, and in good order, on a day that the New York Stock Exchange is open. If the check is received in good order after 4 p.m., Eastern Time, the investment will receive the following day's trade date. All checks should be made payable to SSGA Upromise 529.
If I want to establish an AIP or EFT option on my 529 account, what type of bank account can I use?
You must have a personal checking or savings account held with a U.S. financial institution that is a member of the Automated Clearing House (ACH) network. You cannot use a passbook savings account for an AIP or EFT option. Generally, money market accounts are not eligible.
Can I invest by AIP or EFT from a mutual fund?
No. Most mutual fund companies are not members of the ACH network.
Can I contribute to more than one 529 plan?
There is no limit to the number of accounts an account owner or beneficiary may have. Please note that for all 529 plans sponsored by the State of Nevada the combined maximum contribution amount is $370,000.
Can I contribute to a SSGA Upromise 529 account and a Coverdell Education Savings Account in the same year?
Yes. However, to the extent that the total withdrawals from both accounts exceed the amount of the qualified higher education expenses incurred that qualify for tax-free treatment under Section 529, the recipient must allocate his/her qualified higher education expenses between both withdrawals to determine how much may be treated as tax-free under each program.
*An investment plan of regular investment cannot assure a profit or protect against a loss in a declining market.
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Rollovers and Transfers
Can I roll over money from an UGMA/UTMA account or Coverdell Education Savings Account into the SSGA Upromise 529?
- UGMA/UTMA: You may use money from a Uniform Gifts/Transfers to Minors Account (UGMA/UTMA) to open a SSGA Upromise 529 account. The liquidation of assets currently held in the UGMA/UTMA account would generally be a taxable event. Note that you need to designate that the account is a custodial UGMA/UTMA account on the Account Application when you open a SSGA Upromise 529 Account. UGMA/UTMA custodial accounts are subject to additional requirements and restrictions. Please see the SSGA Upromise 529 Plan Description and Participation Agreement for more information and please contact a tax professional to determine how to transfer an existing UGMA/UTMA account and what the implications of such a transfer may be.
- Coverdell ESA: You can contribute to the SSGA Upromise 529 with proceeds from the sale of assets held in a Coverdell Education Savings Account. When you move money from a Coverdell account to a 529 plan, you have to complete the transfer within the same calendar year to avoid a tax consequence.
Can I move money from another 529 plan to SSGA Upromise 529?
Yes. You may perform a tax-free rollover of a 529 account for the same beneficiary as often as once every 12 months. You may move money by direct rollover (money is transferred directly from your current 529 plan manager to SSGA Upromise 529) or by indirect rollover (you request a check for the amount from the current 529 plan manager and reinvest it in SSGA Upromise 529 within 60 days). Check with your current program manager to verify that it will accept our request for a rollover and to determine if any penalties will apply to the transaction.
When you request a direct rollover for new accounts, you must submit both the Enrollment Form and the Incoming Rollover Form. When you request a direct rollover for existing accounts, you only need to submit the Incoming Rollover Form. You must also provide us with a statement from the program manager showing the basis and earnings amounts in the 529 account at the time of the withdrawal.
Why must I include a breakdown of principal and earnings when I move money from another program?
If you do not provide us with a breakdown of the principal and earnings, federal regulations require that your rollover or transfer be treated as 100% earnings, and you may have to pay taxes on the full amount at the time of any subsequent non-qualified distributions. For direct rollovers, the sending plan is required to provide SSGA Upromise 529 with the breakdown generally within 30 days of the withdrawal. For additional information, refer to the Plan Description and Participation Agreement.
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Withdrawals
How can I use the money in my account?
The money in an account can be used for any purpose. However, to qualify for federal tax-free withdrawals on earnings*, the money must be used for qualified higher education expenses for the beneficiary at an eligible educational institution. These include tuition, mandatory fees, books, supplies, and equipment required for enrollment or attendance; certain room and board costs during any academic period the beneficiary is enrolled at least half-time; and certain expenses for a special-needs student.
How do I know which educational institutions are eligible?
If a school has been assigned a federal school code by the Department of Education, then it is an eligible institution under Section 529.
What if I don't use the money in my account for a qualified higher education expense?
The earnings portion of a withdrawal not used for a beneficiary's qualified higher education expenses is subject to federal and state income taxes and a 10% federal penalty tax. Exceptions to this penalty include a withdrawal made because the beneficiary:
- Has died (if paid to a beneficiary of the beneficiary or the estate of the beneficiary)
- Has become disabled
- Received a scholarship, to the extent the withdrawal amount does not exceed the scholarship amount
- Has enrolled in the United States Military Academy, the United States Naval Academy, the United States Air Force Academy, the United States Coast Guard Academy, or the United States Merchant Marine Academy, to the extent that the amount of the withdrawal does not exceed the costs of education attributable to such attendance
Any accumulated earnings that are withdrawn from your account must be included on the income tax return of the recipient for the tax year in which they are withdrawn. Contact your tax advisor about how to report a non-qualified withdrawal.
Is paying off a student loan a qualified higher education expense?
No. Repayment of student loans is not considered a qualified higher education expense. Qualified expenses include only tuition, mandatory fees, books, supplies, and equipment required for enrollment or attendance; certain room and board costs during any academic period the beneficiary is enrolled at least halftime; and certain expenses for a special-needs student.
How soon can I begin making withdrawals?
Generally you may make withdrawals at any time; however, the Plan will not allow you to withdraw money contributed to your account until it has been collected. Contributions made by check will be held for 10 (ten) calendar days and contributions made by electronic transfer and AIP will be held for 10 (ten) calendar days. Please see the Plan Description and Participation Agreement for other possible delays in processing withdrawals.
How do I make withdrawals from the Plan?
Withdrawals can be requested either online or by submitting a Withdrawal Request Form. Proceeds from qualified withdrawals can be sent to the account owner, the beneficiary, or the higher education institution. Proceeds from non-qualified withdrawals can be sent to the account owner or the beneficiary.
How long does the withdrawal process take?
For withdrawals requested online or by submitting a Withdrawal Request Form, the Plan will generally process the withdrawal from the account within three business days of accepting the request. Proceeds can be sent by check or by electronic transfer to your bank account. To receive proceeds by electronic bank transfer, you must have established banking instructions on your account at least 15 calendar days prior to your withdrawal request. For a mailing address change, a withdrawal will be held for 15 calendar days if proceeds are requested by check to the account owner or to the beneficiary.
During unusual conditions such as when the NYSE is closed and during emergency circumstances as determined by the Securities Exchange Commission, or during heavy year-end processing, withdrawal requests may take up to five business days to process. Please allow 10 business days for the proceeds to reach you.
What tax forms will I receive when I make a withdrawal?
The Plan will generate a Form 1099-Q in January of the calendar year following a year in which there was a withdrawal from the account. The recipient of the 1099-Q will be either the account owner or the beneficiary, depending upon who received the proceeds of the withdrawal. Withdrawals sent to the account owner will be reported under the account owner's Social Security number. Withdrawals sent to the beneficiary or to an educational institution will be reported under the beneficiary's Social Security number, per IRS guidelines.
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* Earnings on non-qualified 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. The availability of tax or other benefits may be contingent on meeting other requirements.
