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.
529 Plan earnings grow on a tax-deferred basis, and withdrawals used for qualified education expenses are generally not subject to federal income tax.
Qualified 529 Expenses:
Contributions may be deductible up to $5,280 annually per beneficiary for single filers and married couples filing jointly, or $2,640 for married individuals filing separately, for Wisconsin income tax purposes. Amounts exceeding the annual limit may be carried forward, subject to applicable limitations.
In 2026, gifts up to $19,000 per recipient qualify for the annual federal gift tax exclusion, subject to applicable requirements. A married couple may give up to $38,000 per recipient if each spouse uses their $19,000 annual exclusion.
Under certain circumstances, an individual may elect to treat a lump-sum 529 contribution as made ratably over a five-year period for federal gift tax purposes, subject to applicable requirements.
In 2026, the five-year election may permit up to $95,000 per donor, or up to $190,000 for a married couple if each spouse makes an eligible contribution and election, subject to applicable gift-tax rules.
529 plan contributions are generally treated as completed gifts and removed from the contributor’s taxable estate for federal estate tax purposes while the account owner may retain control of the account, assuming the contributor is not also the beneficiary.
You can change the beneficiary of a 529 account at any time to another eligible family member without federal income tax or penalty.
Eligible 529 account funds may be rolled directly into the account beneficiary’s Roth IRA, subject to applicable requirements and limitations.
Updated: 8/28/2026
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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. 529 plans are subject to investment risk, contribution and withdrawal restrictions, and tax consequences may apply to nonqualified withdrawals. Tax treatment, deductions, and rollover eligibility depend on applicable law and individual circumstances.
The information is based on sources believed to be reliable and is current as of the date of publication. Applicable laws, regulations, rules, and requirements are subject to change. 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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