Ohio’s 529 Plan, the Perfect Holiday Gift

COLUMBUS, Ohio--(BUSINESS WIRE)--Still trying to figure out what to get that special child on your Christmas list? The answer is clear…give the gift that keeps on giving – Ohio’s 529 Plan. Ohio’s 529 Plan, CollegeAdvantage is the perfect holiday gift for any child on your list.

Rated as one of the best 529 plans in the country by Morningstar, Ohio’s 529 Plan can be used at all types of qualified higher education institutions, including a four-year college or university (public or private), two-year community college, technical or trade school, apprenticeship, or a certificate program. Funds may be used to pay qualified higher education expenses including tuition, fees, room and board, books, computers, and class supplies. Families can even use up to $10,000 for student loan repayment.

Any Ohioan who enrolls in or contributes to an Ohio 529 account, can claim a tax deduction up to $4,000 per beneficiary on their state of Ohio taxable income. All contributions for 2023 must be received in good order before 4 p.m. EST on December 29, 2023. Any Ohio taxpayer — including parents, grandparents, even friends — can help open the door to education after high school for a loved one by contributing to a plan. Account owners pay no taxes on account earnings, and withdrawals used for qualified higher education expenses are exempt from both federal and state taxes. Giving Ohio’s 529 Plan makes the perfect gift and will last a lifetime.

New in 2024… beginning January 1, 2024, funds in a 529 plan that haven’t been used for qualified expenses may be rolled over into a Roth IRA. This new program enhancement is a direct result of the Secure 2.0 Act of 2022. The rollover from a 529 plan to a Roth IRA is a tax-free and penalty-free rollover subject to certain rules:

• The 529 plan account must have been maintained for at least 15 years prior to the date of the 529-to-Roth Rollover.
• The amount of the 529-to-Roth IRA Rollover may not exceed the aggregate amount contributed to the 529 program account (and earnings attributable thereto) before the 5-year period ending on the date of such rollover.
• The aggregate amount of 529-to-Roth IRA Rollovers for the same designated beneficiary may not exceed $35,000.
• The 529-to-Roth IRA Rollover must be made in a direct trustee-to-trustee transfer to a Roth IRA maintained for the benefit of the same designated beneficiary of the 529 program account (not the account owner – if different).
• Each year, the 529-to-Roth IRA Rollover will be subject to annual IRA contribution limits, minus all other IRA contributions made during the year for the same designated beneficiary. In addition, such rollovers may not exceed the amount of compensation the designated beneficiary earned during the year.
• Roth IRA income limitations are waived for 529 plan rollovers to Roth IRAs.

The rollover from a 529 to a Roth IRA is a new program enhancement and individuals interested in making the rollover should first consult their tax or financial advisor.

About the Ohio Tuition Trust Authority/Ohio’s Direct 529 Plan

Ohio’s 529 Plan, CollegeAdvantage is offered and administered by the Ohio Tuition Trust Authority (OTTA), a state agency under the Office of the Chancellor of the Ohio Department of Higher Education. Ohio is the seventh-largest state sponsor of 529 plans in the country. Ohio’s 529 Plan is offered as the CollegeAdvantage Direct 529 Savings Plan and the Blackrock CollegeAdvantage 529 Plan, which is offered and marketed through BlackRock and sold through professional financial advisors. Learn, plan, and start today with Ohio’s 529 Plan at https://www.collegeadvantage.com.