529 plan FAQs: About 529 plan accounts

Fidelity suggests that families consider the following:

• In-state tax benefits. Some states offer tax benefits to residents contributing to in-state or out-of-state 529 plans.
• Plan management. What financial services company is managing the plan and what types of services does the company offer?
• Investment options. Most 529 plans offer a number of investment options, including age-based portfolios, which invest savings based on a beneficiary's age and the number of years until they will be starting college.
• Fees and expenses. Consider account management fees and management fees on underlying portfolios.
• Plan performance. Review 1-, 3-, 5-, and 10-year performance figures when available.

If Fidelity doesn't offer a 529 plan associated with your or your beneficiary's state of residence, consider the UNIQUE College Investing Plan.

Need more help? Try our 529 college savings plan comparison tool

No, you can invest in any state's 529 plan.

No, per IRS regulations 529 plans do not allow for pre-tax contributions.

To open an account, you'll need a few pieces of identifying information about you and your beneficiary. For the account owner, that includes the Social Security number, date of birth, phone number, email address, and legal/mailing address.

For the beneficiary, you'll need to supply the name, date of birth, and Social Security number. If your beneficiary doesn't yet have a Social Security number assigned, many parents choose to open the account with their own name and Social Security number. Once the child's Social Security number is available, the beneficiary can be changed.

Note that a new account will be required in order to change the beneficiary.

Use the applicable 529 college savings plan beneficiary change form below:

• CHET 529 College Savings Program beneficiary change form (PDF)
• MEFA U. Fund College Investment Plan beneficiary change form (PDF)
• The UNIQUE College Investing Plan beneficiary change form (PDF)
• AZ529, Arizona's Education Savings Plan beneficiary change form (PDF)
• DE529 Education Savings Plan beneficiary change form (PDF)

To fund your account online you'll just need the account and routing numbers for the bank the money is coming from.

If your employer offers direct deposit then you can add your 529 account as a destination account by using the direct deposit form from your employer. Or you can use Fidelity's form: Direct deposit/debit for a Fidelity account (PDF)

No, only one person can own the account.

Yes, but you'll need to sell the assets in the UGMA/UTMA account and pay any applicable taxes, fees, and expenses. At that point, you can invest the cash in an UGMA/UTMA (custodial) 529 plan account. An UGMA/UTMA 529 plan account will be subject to the rules for both types of accounts, including applicable UGMA/UTMA state statutes. You cannot change the beneficiary of an UGMA/UTMA 529 plan account.

You may want to consult a tax professional regarding your specific tax situation.

You may transfer assets from your 529 account to a Roth IRA established for the beneficiary of the 529 account. Beginning January 1, 2024, the Secure 2.0 Act of 2022 (the “Act”) provides that you may transfer 529 assets to a Roth IRA under the following conditions: (i) the 529 account must have been maintained for the beneficiary for at least 15 years, (ii) the transfer amount must come from contributions made to the 529 account at least five years prior to the transfer date, (iii) the Roth IRA must have the same beneficiary as the 529 account from which the transfer is made, (iv) the amount transferred from a 529 account to a Roth IRA in the applicable year, together with all other contributions in such year to IRAs for the same beneficiary, must not exceed the Roth IRA annual contribution limit applicable to such beneficiary, and (v) the aggregate amounts transferred from 529 accounts to all Roth IRAs must not exceed $35,000 per beneficiary.

According to the Act, the movement of 529 account assets to a Roth IRA must be completed as a direct transfer from the qualified tuition program to the Roth IRA custodian. The qualified tuition program will be required to send a copy of the principal and earnings in your 529 account as well as any other information specified through forthcoming guidance by the IRS to the Roth IRA custodian as of the date of the distribution to the Roth IRA. It is your responsibility to maintain adequate records and documentation on your accounts to ensure you comply with the 529-to-Roth IRA transfer requirements set forth in the Internal Revenue Code. As of the date of this summary, the IRS has not issued guidance on the 529-to-Roth IRA transfer provision in the Act but is anticipated to do so in the future. Based on forthcoming IRS guidance, it may be necessary to change or modify some of the 529-to-Roth IRA transfer requirements. Please consult a qualified financial or tax professional regarding your specific circumstances before making any investment decision. You may have a gain or loss when you transfer your 529 assets.

To request a transfer to a Roth IRA, please review and complete the withdrawal form (PDF).

To request a transfer to a Fidelity Roth IRA from a 529 not managed by Fidelity, please contact the 529 providing firm.

In the absence of IRS guidance, it is unclear whether a 529 beneficiary change will result in a reset of the 15-year account holding period required by the Legislation. We anticipate forthcoming IRS guidance may provide clarity on this and other related 529-to-Roth IRA transfer questions and will update our materials when more information is available. Please consult with a financial or tax professional regarding your specific circumstances prior to making an investment, including a 529-to-Roth IRA transfer.

Based on the Legislation, the 529 account designated beneficiary does not appear to be subject to the Roth IRA income limits; however, as of the date of this summary, the IRS has not provided guidance on the provisions of the Secure 2.0 Act of 2022 but is anticipated to do so in the future. Based on forthcoming IRS guidance, it may be necessary to change or modify some of the 529-to-Roth IRA transfer requirements. Please consult with a financial or tax professional regarding your specific circumstances prior to making an investment, including a 529-to-Roth IRA transfer.

Yes, you can. This type of transfer is called a rollover. Under federal tax laws you are allowed to roll over a 529 plan account for each beneficiary once during any 12-month period. To roll over an account, download the form: Rollover request—529 college savings plan (PDF). Or call us at 800-544-1914.

You have a few options in this case.

• You may transfer assets from your 529 account to a Roth IRA established for the beneficiary of the 529 account. Beginning January 1, 2024, the Secure 2.0 Act of 2022 (the "Act") provides that you may transfer 529 assets to a Roth IRA under the following conditions: (i) the 529 account must have been maintained for the beneficiary for at least 15 years, (ii) the transfer amount must come from contributions made to the 529 account at least 5 years prior to the transfer date, (iii) the Roth IRA must have the same beneficiary as the 529 account from which the transfer is made, (iv) the amount transferred from a 529 account to a Roth IRA in the applicable year, together with all other contributions in such year to IRAs for the same beneficiary, must not exceed the Roth IRA annual contribution limit applicable to such beneficiary, and (v) the aggregate amounts transferred from 529 accounts to all Roth IRAs must not exceed $35,000 per beneficiary.
• You can take a nonqualified withdrawal. But if you take a nonqualified withdrawal, any earnings withdrawn are subject to federal income taxes plus a 10% federal penalty. Distributions from 529s are done on a pro-rata basis. That means that your withdrawals are made up of contributions and earnings in proportion to their levels in the account. The portion of the withdrawal that is made up of your contributions would be tax- and penalty-free but the earnings portion would be subject to taxes and the 10% penalty.
• Another option is to change the beneficiary on your 529 plan account. The new beneficiary must be an eligible family member of the original beneficiary to avoid federal income taxes and the 10% federal penalty.
  
  A family member is a person who has one of the following relationships with the original beneficiary: (1) son or daughter; (2) stepson or stepdaughter; (3) brother, sister, stepbrother, or stepsister; (4) father, mother, or an ancestor of either; (5) stepfather or stepmother; (6) son or daughter of a brother or sister; (7) brother or sister of a father or mother; (8) son or daughter-in-law, father or mother-in-law, brother or sister-in-law; (9) spouses of the individuals listed in (1)–(8) or the spouse of the beneficiary; and (10) any first cousin.

Note that a new account will be required in order to change the beneficiary.

Use the applicable 529 college savings plan beneficiary change form below:

• CHET 529 College Savings Program beneficiary change form (PDF)
• MEFA U. Fund College Investment Plan beneficiary change form (PDF)
• The UNIQUE College Investing Plan beneficiary change form (PDF)
• AZ529, Arizona's Education Savings Plan beneficiary change form (PDF)
• DE529 Education Savings Plan beneficiary change form (PDF)

You can withdraw the amount of the scholarship award from your 529 plan account without penalty; federal and state income taxes on the earnings still apply.

Yes, it may make sense to have a 529 plan account for each child—especially if they are different ages. Here's why: Each 529 plan account can have only one beneficiary. Many investors who are saving for college choose to take advantage of the Age-based portfolio strategy for their accounts, which manages the account based on the age of the child. If you're saving for 2 children in a single account, your age-based investment strategy may not be appropriate for both children.

There is no annual account fee or minimum required to open any of the Fidelity-managed 529 plan accounts.

The fees charged are incorporated into the total expense ratio. That includes the program management fee which covers the cost of trust administration services, such as recordkeeping, statements, and customer service. Mutual fund fees are also wrapped into the expense ratio. Each of the mutual funds in which the portfolios invest charges investment management fees and other expenses—the mutual fund fees vary by portfolio; the plans do not invest in any mutual fund with a sales load.

Expense ratios may vary by plan. You can find the range of expense ratios on the plan pages, in the account details section.

• New Hampshire UNIQUE College Investing Plan
• Massachusetts U.FUND College Investing Plan
• DE529 Education Savings Plan
• Connecticut CHET College Savings Program
• AZ529, Arizona's Education Savings Plan

If you've taken a distribution or transferred money between qualified education accounts, you should receive Form 1099-Q by early February of the following year to help you prepare your taxes. For example, if you took a distribution in August 2023, you should receive Form 1099-Q in late January or February 2024. Nontaxable distributions from 529 plans are not required to be reported on your income tax return. You must determine the taxability of any distributions.

Use the information on Form 1099-Q to prepare your taxes for the year the distribution was taken. It is up to you to keep records and receipts of your qualified higher education expenses in case the IRS requests them.

Arizona: 86-1015266
Connecticut: 06-6466975
Delaware: 81-0574386
Massachusetts: 37-1445166
New Hampshire: 56-2298285

Gifting is allowed and encouraged. After you set up a college gifting dashboard on your account, you'll be able to share a link with your friends and family. They won't see any of your personal details but they will be able to electronically gift money to the account online. Visit the College gifting page to learn more.

According to the federal law, the most you can save in a 529 account is the expected cost of higher education—so states have set some limits based on that guideline. On an annual basis, any amounts over the annual federal gift-tax exclusion would need to be reported to the IRS as a gift and would count against your lifetime gift tax exclusion. You can "superfund" a 529 by contributing 5 years' worth of your annual federal gift tax exclusion.

To learn more about the gift tax, read Viewpoints: What to know about giving money