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Summer Saving with AZ529 Education Savings Plans
By Hon. Kimberly Yee, Treasurer of Arizona
Summer creates great opportunities to focus on what's ahead for your child's future and create a successful pathway towards their higher education and career dreams. As the Treasurer of Arizona, I help to expand opportunities for all Arizona families to access higher education, from traditional college, vocational training and apprenticeships. With an AZ529 Education Savings Plan, families can put aside savings this summer to grow over time and provide the gift of higher education to loved ones.
What is the AZ529 Education Savings Plan? The AZ529, Arizona’s Education Savings Plan is a tax-advantaged investment plan designed to help families save for a child’s future education expenses. Savings in an AZ529 plan are free from federal income tax, and withdrawals remain tax-free when used for qualified education expenses. Contributions to the AZ529 plan can be deducted from Arizona state income taxes up to $4,000 per beneficiary for a married couple filing jointly or up to $2,000 per beneficiary for single filers.
How can the funds be used? AZ529 savings can be used to pay for a variety of higher education expenses, including tuition, fees, room, board, books, supplies and even internet access. AZ529 funds may be used at accredited public and private colleges, universities, community colleges, technical training schools and apprenticeship programs. Additionally, AZ529 savings can even be used on school tuition for private and religious K-12 educational institutions.
What if the child doesn’t go to college or use all their 529 money? If a child doesn’t go to college or vocational school or doesn’t use all the money saved in an AZ529 plan, there is great news. The law allows families the option of transferring qualified “leftover” 529 funds, of up to $35,000, into the account beneficiary’s Roth IRA retirement fund, free of any tax, penalty, or applicable income limits.
Why is Summer the Perfect Time to Save for Future Education? Summer schedules create more flexibility to explore and save for dream jobs. Here’s three tips to try this summer to help engage children and grandchildren in saving for the future.
1. Learn About Different Careers: Visit the library to find a book about a future career that they might find interesting as they research potential "Dream Jobs".
2. Explore Potential Careers: Take children to a museum or activity that helps inspire a future career, or purchase a summer pass to the Science Center, Natural History Museum, Zoo, Musical Instrument Museum or other destination.
3. Paint a Bank: Encourage excitement about saving money by painting or personalizing a bank. All it takes is a quick trip to the craft or dollar store for supplies, and great for all ages.
Smart financial choices and planning done this summer for a child or grandchild's future can ensure they will achieve the education desired while securing the financial freedom they deserve.
The Honorable Kimberly Yee is the Treasurer of Arizona. When she took office, she asked for the AZ529 Education Savings Plan to be placed under her administration. In a short period of time, Arizona’s 529 accounts have increased by 54,178 new accounts with $2.46 billion in AZ529 assets under management. She has reached diverse communities and families in every county of our state and increased access by translating materials into Spanish and Navajo. For more information about the AZ529 Education Savings Plan, visit
www.az29.gov.
