A 529 College Savings Plan is a tax-advantaged savings account designed to help families save for qualified education expenses. Contributions grow tax-deferred, and qualified withdrawals may be free from federal income tax if applicable IRS requirements are satisfied. Depending on your state of residence, additional tax benefits may also be available.
No taxes are paid on 529 Plan earnings or on withdrawals for qualified education expenses.
Qualified 529 Expenses:
Contributions are only deductible up to $5,130 annually per beneficiary off of your Wisconsin state income for tax purposes. Amounts above this limit can be carried forward to future years.
In 2026, gifts totaling up to $19,000 per individual will qualify for the annual gift tax exclusion.
An account owner can apply up to 5 years of annual gift tax exclusion from a single lump-sum contribution in a single year without incurring a gift tax.
In 2026, this amount is $95,000 for an individual, or $190,000 for couples filing jointly.
Contributions to a 529 plan are generally treated as completed gifts for federal gift and estate tax purposes. As a result, assets are generally removed from the account owner’s taxable estate while remaining under the account owner’s control. The assets also are generally not included in the beneficiary’s taxable estate, provided applicable IRS rules are satisfied.
You can change the beneficiary of the 529 account at any time!*
*If the new beneficiary is a family member of the current beneficiary
Effective January 1, 2024: Conversions may be made from eligible 529 accounts to the account beneficiary’s Roth IRA account.
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Disclosures: Information contained herein is intended for informational, illustrative and/or educational use only and not designed to be a recommendation for any specific investment product, strategy, plan feature or other purpose nor shall it be construed to be the provision of individualized investment, tax or legal advice. Endowment Wealth Management, Inc. (“EWM”) is not soliciting or recommending any action based on this material. This is neither an offer nor a solicitation to buy/or sell securities in any state or jurisdiction where EWM is not registered, or notice filed and does not qualify for an exemption from such registration and notice filing requirements. Prior to making any investment or financial decisions, an investor should seek individualized advice from a personal financial, legal, tax and other professional advisors that consider all of the particular facts and circumstances of the investor’s own situation. All investments involve risk and potential loss of capital and, unless otherwise stated, are not insured or guaranteed.
While the content herein has been obtained from sources that we consider reliable, we do not represent that the information is accurate, complete, or current and it may be relied upon as such. Reliance upon any information in this material is at the sole discretion of the reader. Content is subject to change without notice.
This material is intended solely for general educational purposes. It is not intended as, and should not be relied upon as, tax advice for any particular individual. Federal tax laws are complex and subject to change. Eligibility for a Section 529-to-Roth IRA rollover depends on individual circumstances and applicable law. Readers should consult their tax advisor regarding their specific situation before taking any action.
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