Have questions about 529 plans and how they can help you save for college?
Here are the top questions we receive:
What are the federal and state tax advantages?
Is there an Oklahoma income tax deduction?
Who can open an account?
What are my investment options?
Where do I get information on Oklahoma 529 College Savings Plan performance?
How do I sign up for payroll deduction?
Do I have to use my account at an Oklahoma college or university?
Need more information?
Select a topic below to view a list of questions and answers on that subject.
About 529 Plans
What is a 529 Plan?Just as a 401(k) plan is for retirement savings, a 529 college savings plan is for college savings. 529 refers to Section 529 of the Internal Revenue Code. By federal law, all 529 college savings plans must be state sponsored. Residents of any state can invest in any state's 529 Plan, you do not have to be a resident of a particular state to invest in that state's plan. However, there may be tax advantages available only to state residents for any particular state sponsored plan. There are several types of 529 Plans, including state-sponsored college savings plans and state sponsored prepaid plans. With all 529s — both savings, and prepaid programs — there is no income or age limit for participation. You can even open an Account for yourself. Visit our interactive comparison tool to compare features and benefits of these plans.
How do 529 plans vary?529 plans vary in a number of ways, including contribution limits to the Account (defined by the states), fees to open and maintain an Account, in-state tax treatments such as a state tax deduction, investment options offered, and the financial services company that manages the plan. There may also be other differences, such as special programs or benefits defined by the particular plan. Before investing in a 529 plan, you should consider whether the state you or your designated beneficiary reside in or have taxable income in has a 529 plan that offers favorable state income tax or other benefits that are only available if you invest in that state's 529 plan.
How does a 529 Plan compare to other investment choices, such as custodial accounts?To compare features of 529 plans and custodial accounts, use our interactive comparison tool.
How do I compare college savings options?Check out our interactive comparison tool.
About TIAA-CREFTIAA-CREF is a nearly $400 billion* full-service financial services group of companies that has dedicated itself to helping those in the academic, medical, cultural, and research fields for over 90 years. Our clear and long-held commitment to serving the financial best interests of those who serve the benefit and enlightenment of others has never and will never change. * Combined assets under management as of 12/31/2009.
What are the federal estate and gift tax benefits?Contributions to the Oklahoma 529 College Savings Plan may help you reduce the taxable value of your estate. Contributions to the Plan, together with all other gifts from the Account owner to the beneficiary, may qualify for an annual federal gift tax exclusion of $14,000 per donor ($28,000 for married contributors), per beneficiary for 2013. If an Account owner's contribution to a Plan Account for a beneficiary in a single year exceeds $14,000 ($28,000 for married contributors), the Account owner may elect to treat up to $70,000 of the contributions, or $140,000 for joint filers, as having been made over a period of up to five years for federal gift tax exclusion. Consult your tax advisor.
Are contributions to the Oklahoma 529 College Savings Plan federal tax deductible?No, contributions to the Oklahoma 529 College Savings Plan or any 529 plan are not deductible for federal income tax purposes.
How are withdrawals for qualified higher education expenses taxed?If you are taking a withdrawal to pay for qualified higher education expenses of the beneficiary, there will be no federal or Oklahoma income tax. Use the Withdrawal Form (PDF).
What is a taxable withdrawal?Taxable withdrawals 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 federal income tax on earnings, if any, but will not be subject to the federal 10% additional tax on earnings (the "Additional Tax").
How are withdrawals for non-qualified expenses taxed?A non-qualified withdrawal is any withdrawal that does not meet the requirements of being: (1) a qualified withdrawal; (2) a taxable withdrawal; or (3) a rollover. The earnings portion of a non-qualified withdrawal is subject to federal income taxation, and the additional tax. Recapture provisions apply. See the Disclosure Booklet for details.
What is the Generation Skipping Tax?Transfer of funds or a change in beneficiary is subject to the Generation Skipping Tax (GST) if the new beneficiary is two or more generations below the prior beneficiary. If transfer is subject to GST, tax is imposed on the prior beneficiary. Account owners should consult their own tax advisors for guidance when considering a change of beneficiary or a transfer to another Account.
Investment Options and Performance
Can I see a list of the underlying funds?Yes, For a list of the underlying funds, read the Disclosure Booklet
Can I select the investments for my account?You may choose among the 9 Plan Investment Options, but not the underlying mutual funds or other investment vehicles to which funds in the investment option may be allocated. Under federal law, an Account owner may not have direct or indirect control over the investments in a 529 Plan. See Disclosure Booklet for a list of underlying funds.
Can I change my investment selection?Yes. Each time you make a contribution you may select any one of the 9 Investment Options. Once invested in a particular investment option, contributions and any earnings may be transferred to another investment option only twice per calendar year or upon a transfer of funds to a Plan Account for a different eligible beneficiary (see the Plan Disclosure Booklet for more information). Use the Rebalance Form.
Opening an Account, Contributions and Fees
How do I open an account?You can Enroll Online and submit your initial contribution electronically from your bank account or establish an Automatic Contribution Plan (PDF). You can also Download Enrollment Materials, or you can Request an Enrollment Kit to have enrollment materials mailed to your address. Allow five to seven days for delivery.
Are there any fees associated with opening an Oklahoma 529 College Savings Plan account?With the Oklahoma 529 College Savings Plan, there are no sales charges, start-up or maintenance fees. An annual asset-based management fee will be paid to TIAA-CREF Tuition Financing, Inc. to cover the cost of investment management and administrative services. The estimated underlying fund expenses range from 0.07% to 0.51%. Please note that the State of Oklahoma reserves the right to change the current fee and impose new or additional fees, expenses, charges or penalties in the future. For details on the management fee, please see fees and expenses.
What is the maximum that I can contribute to an account?There is no annual limit on the amount you may contribute. However, there is an overall maximum Account balance limit of $300,000 which applies to all Accounts opened for a beneficiary. An Account owner may contribute to a beneficiary's Account if, at the time of the contribution, the total balance of all Accounts for that beneficiary does not exceed $300,000. Accounts that have reached the maximum Account balance limit may continue to accrue earnings.
Can I take a distribution from both an Oklahoma 529 College Savings Plan account and Coverdell Educations Savings Account to pay for expenses in the same year?Yes. However, you must apply the distributions to different eligible expenses in order to obtain the favorable tax treatment. See IRS Publication 970 for more detail, or consult your tax advisor.
How do I contribute to the Oklahoma 529 College Savings Plan?You can open an Account by check, through the automatic contribution plan, by electronic funds transfer (including electronic purchase option), or through a transfer of funds between Accounts or a rollover. The minimum initial contribution is $100 per Investment Option and the minimum subsequent contribution to an Account is $25 per Investment Option. You can also contribute as little as $15 per investment option per pay period using payroll deduction through participating employers. Each Account can have only one Account owner and one beneficiary. However, each beneficiary may have more than one Account and, you may open separate Accounts for as many different beneficiaries as you wish. To set up an automatic contribution plan log-in to your account or use the Electronic Banking Form (PDF). To set up Payroll Deduction, use the Payroll Deduction Form (PDF).
How do I keep track of my account?You have online access to your Account information 24 hours a day, or you can call and speak to one of our college-savings specialists at 1-877-654-7284 , Monday through Friday, 7:00 am - 7:00 pm CT. You'll receive quarterly and annual statements that show Account activity. A separate confirmation statement will also be mailed, which lists every transaction made to the Account. (Quarterly statements will be provided for periodic payment plans, such as payroll deduction.) Log-in to your account.
How do I sign up for e-DeliveryIf you'd like to enroll to receive your Account statements and/or Plan disclosure online, click here, log into your account, and click on "Change Account Statement Delivery."
Plan Requirements, Using the Funds
How do I know which educational institutions are eligible?Contact your school to determine if it qualifies as an eligible educational institution or use the Federal School Code Search on the Free Application for Federal Student Aid (FAFSA) website.
What are the qualified higher education expenses?Qualified higher education expenses include tuition, fees, and the cost of books, supplies, and equipment required for the enrollment and attendance of the Beneficiary at an eligible educational institution, and certain room and board expenses. Qualified higher education expenses also include certain additional enrollment and attendant costs of a beneficiary who is a special needs beneficiary in connection with the beneficiary's enrollment or attendance at an eligible institution. For this purpose, an eligible educational institution generally includes accredited postsecondary educational institutions offering credit toward a bachelor's degree, an associate's degree, a graduate-level degree or professional degree, or another recognized postsecondary credential.
The definition of qualified higher education expenses has been expanded by federal statute to cover amounts paid in 2010 for the purchase of computer equipment or software (other than software designed for sports, games or hobbies, unless such software is primarily educational in nature) or for Internet access and related services. The purchased equipment, software or services must be used by the beneficiary (including the beneficiary's family) during any of the years that the beneficiary is enrolled at an eligible educational institution.
How do I withdraw money to pay for college?When you want to withdraw money (take a distribution) from your Account, you may request a withdrawal from your Account online that will be sent via Automated Clearing House* to your bank account, typically within 3 business days, as long as your banking information has been on file for at least 30 days and your address has not changed within the last 30 days. You may also request a withdrawal by using the Withdrawal Form (PDF). This form can be used for withdrawals for qualified higher education expenses of your beneficiary, non-qualified withdrawals, or withdrawals due to death, disability or scholarship. Allow 7-10 days for mail and processing time. Note: Non-qualified withdrawals will be subject to federal and Oklahoma income taxes and a 10% additional federal tax. Keep your receipts.
*Automated Clearing House payments may take several days to be deposited into your bank account.
If I move out of Oklahoma, what will happen to my account?If you move to another state, you can still keep your money invested in your Plan Account. You can also continue contributing money to your Account. Before investing in a 529 plan, you should consider whether the state you or your designated beneficiary reside in or have taxable income in has a 529 plan that offers favorable state income tax or other benefits that are only available if you invest in that state's 529 plan.
What room and board expenses are covered?The beneficiary must be enrolled at least half-time at an eligible post-secondary institution which leads to a recognized educational credential in order for room and board to be considered an eligible qualified higher education expense. For students living at home with parents, as well as students living in non-campus housing, the eligible educational institution's "cost of attendance" allowance for purposes of determining eligibility for federal education assistance for that year will be the room and board amount treated as a qualified higher education expense. For students living in housing owned or operated by the eligible educational institution, if the actual invoice amount charged by the eligible educational institution for room and board is higher than the "cost of attendance" figure, then the actual invoice amount may be treated as qualified room and board costs.
Can a HOPE/American Opportunity Credit or Lifetime Learning Credit for qualified tuition and other related expenses still be taken?A student or the student's parent may claim a HOPE/American Opportunity Credit or Lifetime Learning Credit for certain qualified education expenses, provided that eligibility requirements for the credit are met. You should consult the current version of IRS Publication 970, Tax Benefits for Education, for information about this and other tax incentives available for educational expenses.
Can I use the money at schools outside the US?Yes, 529 Plan assets can be used at some accredited foreign schools. Contact your school to determine if it qualifies as an eligible educational institution.
What if my child decides not to attend college?If the beneficiary of an Account does not attend college, the Account owner may name another beneficiary for the Account who must be a certain member of the family of the beneficiary that is being replaced (See definition of 'member of the family'). Otherwise, if the funds are withdrawn for a purpose other than to pay for qualified higher education expenses (except in the event of a beneficiary's death, disability, scholarship or attendance at a military academy), or they are treated as withdrawn (for example if an ineligible beneficiary is named) there will be a 10% additional federal tax on the earnings of the Account owner's tax rate. See the Disclosure Booklet for details.
What is a non-qualified withdrawal?A non-qualified withdrawal is any withdrawal that does not meet the requirements of being: (1) a qualified withdrawal; (2) a taxable withdrawal; or (3) a rollover. The earnings portion of a non-qualified withdrawal is subject to federal income taxation, and the additional tax. Recapture provisions apply. See the Disclosure Booklet for details.
What happens in the event of death or disability of the beneficiary?If the distribution is made due to the death or disability of the beneficiary, the earnings portion of such a withdrawal is subject to federal income tax but is not subject to a 10% additional federal tax.
Will participation in the Oklahoma 529 College Savings Plan affect my beneficiary's eligibility for financial aid?The 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.
What if my child gets a full or partial scholarship?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 penalty or additional tax. The earnings portion of the amount withdrawn will be subject to the additional federal tax of 10% to the extent the amount withdrawn exceeds the amount of the scholarship.
Is paying off a student loan a qualified higher education expense?No. Repayment of student loans is not considered a qualified higher education expense.
Who can be the beneficiary of an Account?Any U.S. citizen or resident alien, including the Account holder, can be the beneficiary. The beneficiary must have a valid Social Security Number or taxpayer identification number.
Can I change the beneficiary of my account?Yes, you can change your beneficiary at any time, or transfer a portion of your investment to a different eligible beneficiary. The new beneficiary must be a member of the previous beneficiary's family, as described in the Oklahoma 529 College Savings Plan Disclosure Booklet (PDF). Use the Change of Beneficiary Form (PDF).
Who qualifies as member of the family?A "member of the family" of a Beneficiary is a person related to that beneficiary as follows: (i) a son or daughter, or a descendant of either; (ii) a stepson or stepdaughter; (iii) a brother, sister, stepbrother or stepsister; (iv) the father or mother, or an ancestor of either; (v) a stepfather or stepmother; (vi) a son or daughter of a brother or sister; (vii) a brother or sister of the father or mother; (viii) a son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law or sister-in-law; (ix) the spouse of the beneficiary or of any of the other foregoing individuals; or (x) a first cousin of the beneficiary. For this purpose, a child includes a legally adopted child and a brother or sister includes a half-brother or half-sister.
Rollovers and Transfers
Can I transfer assets in a Coverdell Education Savings Account to the Oklahoma 529 College Savings Plan?
Can I roll over funds from another 529 plan into the Oklahoma 529 College Savings Plan?You are permitted to transfer funds from another 529 college savings plan to an account in the Oklahoma 529 College Savings Plan for the same beneficiary once within a 12-month period without incurring federal income tax. The 529 college savings plan from which you are transferring funds may be subject to differences in features, costs and surrender charges. You should consult your tax advisor or the other 529 college savings plan. State and local taxes may apply. To complete a rollover, use the Rollover Form (PDF).
Can assets from an UGMA/UTMA account be transferred to the Oklahoma 529 College Savings Plan?Yes, though transferring UGMA/UTMA assets into a 529 plan Account may result in a tax liability. You should discuss this with your financial advisor. UGMA/UTMA accounts cannot be opened online.
Still have questions?
See the Disclosure Booklet for more details on plan requirements, contributions and withdrawals, investment options, tax considerations, and rollovers and transfers.
Or call us now at 1-877-654-7284.