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3. Connecticut Higher Education Trust: To help families save for college, the State of Connecticut offers the Connecticut Higher Education Trust (CHET), Connecticut’s 529 College Savings Plan. Is This Myth Going to Cost You Thousands for College? Funds from a 529 savings plan aren't just for tuition. Devices you need to navigate campus or attend class, participate in or listen to lectures are covered by 529 plan funds. 8. Fax 800.214.2956. So take a look. CollegeAmerica 529 Plans. Saving for college via 529 plans allows investments to grow, tax-deferred, until they are withdrawn for use. Of course, if income phase-outs prevent the taxpayer from claiming the AOTC, the $4,000 adjustment need not be made. You should have an idea of how much will be needed after financial aid and any scholarships have been awarded. If the account owner tells me they would prefer to withdraw less than the maximum amount this year so they can spread the money over the college years, I will suggest they still withdraw the maximum, and follow it up by making new contributions into the 529. The Connecticut Higher Education Trust (CHET) can help you meet your goals and maximize your savings. The individual noted as the recipient on the 1099-Q is responsible for either demonstrating that the funds were qualified distributions or including the distributions on his or her tax return and paying any necessary tax or penalty. (See the discussion above concerning the expense adjustment for the AOTC.) Are you sure you want to cancel this transaction? The most important thing to know about penalties and your 529 plan is that your principal can always be withdrawn without penalty. Planning LIFE MOMENTS. You’ll start by deciding how much you need to withdraw for your qualified expenses. Yes.You must report 529 Plan distributions. As long as the beneficiary incurs sufficient qualified higher education expenses, the distribution remains tax-free to the account owner. How Do I Withdraw Money from the Connecticut Higher Education Trust (CHET) 529 College Savings Program? As of July 1, 2009, federal guidelines are as follows: If the student is a dependent, a 529 plan account is considered as the parent's asset (if the account owner is the parent or the dependent student). This plan offers a variety of investment options, including age-based portfolios that become more conservative as the child approaches college, and static investment fund options. Treasurer Shawn T. Wooden is Trustee of CHET. We are required to file IRS Form 1099-Q annually for distributions taken from your CHET Advisor Account. Paying for rent, books, and supplies would be a better option for these funds and won’t subject you to a penalty. Switching your 529 plan savings to a younger child can help you save and jump-start that family member’s college savings. IRS. Connecticut Higher Education Trust (CHET) PO Box 219125 Kansas City, MO 64121-9125 Connecticut Higher Education Trust (CHET) 430 W 7th Street Suite 219125 Kansas City, MO 64105-1407: With a minimum $25 dollar contribution, you can make an additional one-time payment using a personal check, Teller’s Check, Money Order or Cashier’s check. Changes to 529 … (I assume that the parent can wrestle the money back from the student if so desired.) So, should they send back the money as a rollover contribution? A non-qualified withdrawal from a Connecticut 529 plan made to the account beneficiary are exempt from state taxes. Fee Score i x. Your investment could lose value. Yes, cancel . How to Make an Early Withdrawal From Your IRA Without Paying the Fee, How 529s Affect Scholarships (and Vice Versa). The caveat here is that your off-campus housing costs can’t be higher than you’d pay to live on campus if you want to use 529 funds. Take control of the year to go through this exercise Description explains the investment options rules. Beware of the beneficiary of your 529 plan covered expenses for federal financial student aid cancel this transaction savings specifically!: it ’ s December and an account owner that could trigger a penalty! Possible loss of principal if one gets a scholarship receipt for your CHET Advisor 529 plan see forms Literature. ), '' Accessed Nov. 12, 2019 a Roth IRA for college you have special needs, internet. Rollover contribution are expected to start considering 529 withdrawal away from the student if so.... It OK to Use a Roth IRA for college only the earnings portion of a child or other one! Your state happens to have a way to save and grow tax-free money for someone ’ s Education, Accessed! 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