Frequently asked questions

When you contribute to a Path2College 529 Plan account, any earnings are federal and Georgia income tax-deferred until withdrawn. Then, withdrawals used to pay for qualified education expenses are federal and state income tax-free.

Yes. Georgia taxpayers may be eligible for a Georgia income tax deduction on contributions made to a Path2College 529 Plan up to $8,000 per year, per beneficiary for joint filers or $4,000 for individual filers per year. You do not have to be the account owner or related to the beneficiary to take advantage of this deduction. Amounts transferred from another 529 college savings plan are not eligible for the Georgia state income tax deduction.

No. If you are making a withdrawal to cover a qualified education expense for the beneficiary, the withdrawal is not subject to federal or state income tax.

Qualified education expenses include tuition, certain room and board expenses, fees, books, supplies, computers and equipment required for the enrollment and attendance of the beneficiary at an eligible educational institution, which includes most postsecondary institutions. Review the Plan Description for additional details on eligible expenses and withdrawals.

The earnings portion of a non-qualified withdrawal is subject to federal and state income taxation, plus an additional 10% federal tax. See the Plan Description for details.

The available federal tax benefits for paying qualified education expenses through these programs must be coordinated to avoid the duplication of such benefits. Account owners should consult a qualified tax advisor regarding the interaction under the Internal Revenue Code (IRC) of the federal income tax education-incentive provisions when addressing account withdrawals.

Contributions to a Path2College account may help reduce the taxable value of your estate. Learn more about gifting to an existing account. For additional details on tax benefits, we recommend consulting a tax advisor.

No, there is no federal income tax deduction for 529 plan contributions, regardless of where you live, or which 529 plan you participate in.

Plan contributions are after-tax.

At the federal level, qualified rollovers from a 529 plan account to a Roth IRA do not incur federal income tax or penalties.

State tax treatment of a rollover from a 529 plan into a Roth IRA is determined by the state where you file state income tax.

For Georgia taxpayers, a rollover from a 529 plan account to a Roth IRA will be treated as a qualified withdrawal. If you are not a Georgia taxpayer, these withdrawals may include recapture of tax deduction and state income tax.

State tax treatment of a rollover from a 529 plan into a Roth IRA is determined by the state where you file state income tax. Account Owners and Beneficiaries should consult with a qualified tax professional before rolling over funds from their 529 plan to contribute to a Roth IRA. You are responsible for determining the eligibility of a 529 plan to Roth IRA rollover including tracking and documenting the length of time the 529 plan account has been opened and the amount of assets in your 529 plan account eligible to be rolled into a Roth IRA.

Qualified higher education expenses include tuition, certain room and board expenses, fees, books, supplies and equipment required for the enrollment and attendance of the beneficiary at an eligible educational institution. This includes most postsecondary institutions. When used by the beneficiary enrolled at an eligible educational institution, computers and related technology such as internet access fees, software or printers are also considered qualified higher education expenses.

Qualified higher education expenses also include certain additional enrollment and attendance costs at eligible educational institutions for any beneficiary with special needs.

Qualified higher education expenses also include:

(a) tuition in connection with enrollment or attendance at a primary or secondary public, private or religious K-12 school (up to a maximum of $10,000 of distributions per taxable year per beneficiary from all Section 529 programs);¹ (b) expenses for fees, books, supplies and equipment required for the participation of a beneficiary in a certified apprenticeship program;¹ and (c) amounts paid as principal or interest on any qualified education loan of either the beneficiary or a sibling of the beneficiary (up to a lifetime limit of $10,000 per individual).¹ Review the Plan Description for additional information, including the state tax treatment of withdrawals for these expenses.

Footnotes

1. ¹Withdrawals for tuition expenses at a public, private or religious elementary, middle, or high school, registered apprenticeship programs, and student loans can be withdrawn free from federal and Georgia income tax. If you are not a Georgia taxpayer, these withdrawals may include recapture of tax deduction, state income tax as well as penalties. You should talk to a qualified professional about how tax provisions affect your circumstances.↩

A non-qualified withdrawal is any withdrawal that does not meet the requirements of being a (a) qualified withdrawal; (b) taxable withdrawal; or (c) rollover. The earnings portion of a nonqualified withdrawal is subject to state and federal income taxation, plus a 10% additional federal penalty tax on earnings (the “Additional Tax”). See the Plan Description for more info.

Your Path2College 529 Plan account can be used at eligible colleges, universities, vocational schools, community colleges, graduate or postgraduate programs, apprenticeships and more.¹ Contact your school to determine whether it qualifies as an eligible educational institution or use the Federal School Code Search tool on the Free Application for Federal Student Aid (FAFSA) website.

Footnotes

1. ¹Withdrawals for registered apprenticeship programs can be withdrawn free from federal and Georgia income tax. If you are not a Georgia taxpayer, these withdrawals may include recapture of tax deduction, state income tax as well as penalties. You should talk to a qualified professional about how tax provisions affect your circumstances.
   
   Apprenticeship programs must be registered and certified with the Secretary of Labor under the National Apprenticeship Act.↩

You can withdrawal from your account online. Select the beneficiary you would like to withdraw the money for, click “Make a Withdrawal” on the left-hand navigation and follow the directions. You may also request a withdrawal using the Withdrawal Request Form.

The beneficiary must be enrolled at least half-time at an eligible postsecondary institution. For students living in housing owned and operated by the institution, the full invoice amount will be used to determine the qualified room and board expenses. For those students living at home or in off-campus housing, the “cost of attendance” allowance for the individual institution will be used to determine the qualified room and board expense amount.

Yes. Computers and related technology such as internet access fees, software or printers are considered qualified education expenses. The student must be the primary user of the equipment.

Federal tax treatment of a 529 plan’s qualified higher education expenses (QHEEs) includes the repayment of up to $10,000 (including principal and interest) on any qualified education loan of either a 529 plan designated beneficiary or a sibling of the designated beneficiary. To be a qualified expense, the loan repayment amount for an individual is subject to a lifetime limit of $10,000.¹ Get additional details in the Plan Description.

Footnotes

1. ¹Withdrawals for student loan repayment can be withdrawn free from federal and Georgia income tax. If you are not a Georgia taxpayer, these withdrawals may include recapture of tax deduction and state income tax as well as penalties. You should talk to a qualified professional about how tax provisions affect your circumstances.↩

A taxable withdrawal will be subject to applicable state and federal income tax on earnings, if any, but will not be subject to the 10% additional federal tax on earnings (the “Additional Tax”).

Some examples of a taxable withdrawal include a beneficiary’s death, permanent disability, receipt of a scholarship award or attendance at a military academy. For more information, review the Plan Description.

Taxable withdrawals that are not subject to the 10% federal penalty tax are withdrawals due to the beneficiary’s death, the permanent disability of the beneficiary, the beneficiary’s receipt of a scholarship award or certain other tax-free amounts, or the beneficiary’s attendance at a military academy. A taxable withdrawal will be subject to applicable state and federal income tax on earnings, if any.

Yes. Funds may be redeposited to your account within 60 days of the refund without penalty should a student need to withdraw from a class. The recontributed amount cannot exceed the amount of the refund.

The SECURE 2.0 Act of 2022, which in addition to a number of significant retirement savings related enhancements, amended Section 529 of the Internal Revenue Code to allow for funds in long-term 529 plan accounts to be rolled over from a 529 plan account to a Roth IRA for the benefit of the 529 account beneficiary.

Account owners may roll money from a 529 account to a Roth IRA for the benefit of the 529 plan account beneficiary without incurring federal income tax or penalties (state tax treatment varies), subject to the following conditions:

• The 529 plan account must be open for 15 or more years, ending with the date of the rollover;
• Contributions and associated earnings that you transfer to the Roth IRA must be in the 529 plan account for more than five (5) years, ending with the date of the rollover;
• The Internal Revenue Code permits a lifetime maximum amount of $35,000 per designated beneficiary to be rolled over from 529 plan accounts to Roth IRAs;
• 529 plan assets can only be rolled over into a Roth IRA maintained for the benefit of the designated beneficiary on the 529 plan account;
• 529 plan assets must be sent directly to the Roth IRA;
• Roth IRA income limitations are waived for 529 plan rollovers to Roth IRAs; and
• The Roth IRA contribution is subject to the Roth IRA contribution limit for the taxable year applicable to the designated beneficiary for all individual retirement plans maintained for the benefit of the designated beneficiary.

State tax treatment of a rollover from a 529 plan into a Roth IRA is determined by the state where you file state income tax. Account Owners and Beneficiaries should consult with a qualified tax professional before rolling over funds from their 529 plan to contribute to a Roth IRA. You are responsible for determining the eligibility of a 529 plan to Roth IRA rollover including tracking and documenting the length of time the 529 plan account has been opened and the amount of assets in your 529 plan account eligible to be rolled into a Roth IRA.

At the federal level, qualified rollovers from a 529 plan account to a Roth IRA do not incur federal income tax or penalties.

State tax treatment of a rollover from a 529 plan into a Roth IRA is determined by the state where you file state income tax.

For Georgia taxpayers, a rollover from a 529 plan account to a Roth IRA will be treated as a qualified withdrawal. If you are not a Georgia taxpayer, these withdrawals may include recapture of tax deduction and state income tax.

State tax treatment of a rollover from a 529 plan into a Roth IRA is determined by the state where you file state income tax. Account Owners and Beneficiaries should consult with a qualified tax professional before rolling over funds from their 529 plan to contribute to a Roth IRA. You are responsible for determining the eligibility of a 529 plan to Roth IRA rollover including tracking and documenting the length of time the 529 plan account has been opened and the amount of assets in your 529 plan account eligible to be rolled into a Roth IRA.

Anyone with a valid Social Security Number or Taxpayer Identification Number can be the beneficiary, including the account owner. Learn more about who can open, benefit from and contribute to Path2College 529 Plan here.

No, but you might want to have a separate account for each child. Since there is no cost associated with opening a Path2College 529 Plan account or owning more than one account, many parents opt to open separate accounts for each child.

You might do this to align investment strategies with the time frame each child will begin using the funds. For example, an older child’s account could be more conservatively invested to help protect your contributions as they near college, whereas a younger child’s account might be invested to balance growth and income strategies during a longer time frame. You may also prefer to pay college expenses first out of your highest growth account to maximize federal tax benefits and to encourage gift contributions from friends and family.

Keep in mind that a Path2College 529 Plan allows you the flexibility to select multiple investment portfolio options within each account. This offers you more control to manage risk on your terms. For example, adding the Principal Plus Interest Portfolio can help ensure a portion of your college savings is principal-protected.

Multiple accounts can also aid in estate planning by ensuring that college funds are allocated appropriately to each beneficiary upon the death of the account owner. However, if you prefer to save in a single account, you can do so. You can change beneficiaries at any time and at no additional cost.

Yes. A beneficiary may have more than one Path2College 529 Plan account. However, an account owner can have only one account for each beneficiary.

For example, a child may be the beneficiary of multiple separate accounts, owned by their parent and/or grandparent and/or aunt, etc. There is an overall maximum account balance limit of $235,000, which applies to all accounts opened for a beneficiary.

Yes. You can change the beneficiary of your account at any time or transfer a portion of your investment to a different eligible beneficiary. The new beneficiary must be an eligible member of the previous beneficiary’s family.

For more information, read the form on how to change your beneficiary.

Performance data for Path2College 529 Plan’s investment options are available here.

The Path2College 529 Plan offers a variety of investment options to fit your life situation, risk tolerance and savings goals. These options vary in investment strategy and degree of risk, allowing you to select a portfolio or combination of portfolios that fit your needs and savings goals.

To compare the Path2College 529 Plan investment options, visit the Investment Comparison page. For more information on the investment objectives, risks, charges and expenses, read the Plan Description.

Yes. Each time you make a contribution, you may select from any of the Path2College 529 Plan investment options. Once invested in a particular portfolio, contributions and earnings may be transferred to another investment option twice per calendar year or upon transfer of funds to a plan account for a different eligible beneficiary (see the Plan Description for more information).

To transfer funds between investment options, log in to your account, click “View Details” for your beneficiary, then choose “Change investment option.” You may also request and submit by mail the Change of Investment Form.

How much you need to save will depend on what you plan to use the money for and when.

A few helpful tools:

• Check out the College Savings Calculator to estimate the cost of college.
• Use our Savings Plan Estimator to see how your savings could add up over time.

You can contribute to a Path2College 529 Plan account in a variety of ways: electronic funds transfer, establishing a recurring contribution, establishing payroll direct deposit, a check, a rollover from another state’s 529 plan account, or redemption proceeds from a Coverdell Education Savings Account or qualified U.S. savings bond. Your contribution will be invested according to your allocation instructions, which you may change at any time online, by telephone or by requesting and submitting the Change of Investment Form. For more information, click here.

If you would like to contribute to a child’s college account, but are not the account owner, you can do so. Contributing to an existing Path2College 529 Plan account is easy and secure with the online Ugift^® platform. Gift contributions can also be made by check and mailed in. Check with your tax professional.

For the tax year 20232024:

• There’s no federal gift tax on contributions you make up to $17,000$18,000 per year if you’re a single filer or $34,000$36,000 if you’re a married couple.
• You can also accelerate your gifting with a lump-sum gift of $85,000$90,000 if you’re a single filer or $170,000$180,000 if you’re married and pro-rate the gift over five years per the federal gift tax exclusion.
• You can gift this amount to as many individuals or beneficiaries as you like, free from income tax.

Consult your tax professional for more details.

To view your transaction history, log in to your account, click “View Details” for your beneficiary and scroll down to the transactions section. You can always speak to one of our college savings specialists at 877-424-4377, Monday through Friday, 8 a.m. to 8 p.m. ET.

There is an overall maximum account balance limit of $235,000, which applies to all Path2College 529 Plan accounts opened for a beneficiary. Accounts that have reached the maximum account balance limit may continue to accrue earnings.

The minimum contribution amount is $25. If you are contributing with payroll direct deposit through your employer, any amount is accepted.

Assets in a parent-owned 529 account have less of an impact on financial aid than some other savings methods. Expected Family Contribution (EFC) calculations for financial aid generally factor parent assets outside of retirement savings at approximately 5%, whereas student assets are generally factored in at 20% or more. Therefore, a parent-owned 529 account may have less of an impact on financial aid eligibility than assets owned by the student.¹

Footnotes

1. ¹The treatment of investments in a 529 savings plan varies by school. Assets are typically treated as the account holder’s and not the student’s. (Student assets are generally assessed at 20%, whereas parental assets are generally assessed at 5.6%.) Any investments, including those in 529 accounts, may affect the student’s eligibility to get financial aid based on need. You should check with the schools you are considering regarding this issue.↩

If the beneficiary receives a scholarship that covers the cost of qualified expenses, you can withdraw the funds from your account up to the amount of the scholarship without incurring the 10% federal tax penalty on the earnings portion. However, the earnings portion will be subject to federal and state income tax. If the amount withdrawn exceeds the amount of the scholarship, the earnings portion of the amount withdrawn will be subject to the additional 10% federal penalty tax. Please consult with a qualified tax advisor or consultant.

Historically, withdrawals from grandparent owned 529 plans have been considered untaxed income to the student and added to the student’s adjusted gross income on the FAFSA. Beginning with the 2024-2025 FAFSA, withdrawals from grandparent owned 529 plans will no longer need to be reported on the FAFSA or negatively affect the student’s eligibility for federal financial aid. FAFSA simplification is subject to change. You should check with the schools you are considering regarding this issue. For assistance or help completing FAFSA click here.

Anyone with a valid Social Security Number or Taxpayer Identification Number can open a Path2College 529 Plan account. Accounts can be opened online or by downloading enrollment materials.

You can also open an account by requesting a mailed enrollment kit. Click here to request one online or give us a call at 877-424-4377.

There are no sales charges, startup or maintenance fees associated with Path2College 529 accounts. For details on total annual asset-based fees, comprised of the underlying investment expenses for each investment option, the plan manager fee and state administration fee, review the Plan Fees for each individual investment portfolio.

Yes. You can transfer funds from another 529 plan to your Path2College 529 Plan account for the same beneficiary once within a 12-month period without incurring tax penalties.

Consolidating education savings into a Path2College 529 Plan also gives you a single view of your savings and performance as well as single-step payments to colleges, universities, K-12 schools, etc.

Path2College 529 Plan expenses are currently the lowest in the country.¹ You pay no sales charges, startup fees or maintenance fees.

Note that incoming rollover funds do not qualify as contributions for the Georgia state income tax deduction. The 529 plan from which you are transferring funds may be subject to different features, costs and surrender charges. It is recommended that you consult your tax advisor or the other 529 college savings plan prior to making any decisions. For more information, see How to manage an incoming rollover from another 529 saving plan account.

Footnotes

1. ¹Source: ISS Market Intelligence 529 College Savings Fee Analysis Q4 2023. Path2College 529 Plan’s average annual asset-based fee is 0.09% for all portfolios compared to 0.51% for all 529 plans.↩

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