Tax Benefits & Features of a PA 529 Plan
Earnings grow federal income tax-free – Earnings grow tax-deferred and are free from federal income tax when used for qualified education expenses.
Earnings grow state income tax-free – For Pennsylvania taxpayers, earnings grow tax-deferred and are free from Pennsylvania state income tax when used for qualified education expenses.
Pennsylvania state income tax deduction – Pennsylvania taxpayers can deduct up to $18,000 in contributions per beneficiary per year ($36,000 if married filing jointly, assuming each spouse had income of at least $18,000) from their Pennsylvania taxable income for the purposes of determining their state income taxes.
Federal gift tax – You can contribute up to $90,000 in a single year ($180,000 for a married couple filing jointly) for each beneficiary without incurring federal gift tax. The amount contributed is prorated over 5 years so, for example, a $30,000 contribution would use $6,000 of the current $18,000 annual gift tax exclusion each year for 5 years.
Federal estate tax – If you die with money remaining in your account, it will not be included in your estate for federal estate tax purposes. However, if you choose to take advantage of the federal gift tax averaging option mentioned above and you die within five years of contributing, a prorated portion of the contribution will be subject to estate tax.**
Pennsylvania inheritance tax – Funds in the account are exempt from Pennsylvania inheritance tax. Depending on the relationship between the deceased account owner and the heirs, this can be a savings of up to 15% of the entire value of the account.
Completed gift – One of the unique features of 529 accounts is that a contribution is considered by federal law to be a completed gift from the contributor to the beneficiary. However, the account owner, not the beneficiary, controls the account. So if you are both the contributor and account owner, the amount you contribute is removed from your estate but nevertheless you retain complete control over the assets – including the right to change the beneficiary or to withdraw the assets and use them for any purpose (subject to taxes and penalties).
For more information, consult your tax advisor or estate planning attorney.
* The availability of tax or other benefits may be contingent on meeting other requirements. The earnings portion of a withdrawal not used to pay for qualified expenses may be subject to federal income tax and a 10% federal penalty tax; the entire withdrawal may be subject to state and local income taxes.
** In the event the donor does not survive the five-year period, a prorated amount will revert to the donor's taxable estate
As a Pennsylvania resident, you get special treatment. Not only are your contributions deductible from your Pennsylvania state income tax, the entire value of your account is exempt from Pennsylvania inheritance tax. Assets held in a PA 529 plan are not counted when determining state financial aid for college. Assets in any other state 529 plan are counted. PA 529 assets are also protected from creditors in Pennsylvania. Assets in out-of-state plans are not protected.
Another unique benefit to PA 529 plans is the SAGE Scholars Tuition Rewards program, which offers tuition discounts to 400+ private colleges nationwide, including over 50 in Pennsylvania.
Many families rely on student loans to pay for college, and all loans represent debt that a family incurs. Any savings, even in small increments, that a family can put away will offset the amount of debt it must take on to pay for college. Financial aid may also be available but may not cover the full cost of attendance.
Yes. PA 529 accounts are not included in determining eligibility for Pennsylvania state financial aid programs. Savings held in other state's 529 plans do not receive this benefit.
State financial aid – PA 529 accounts are not included in determining eligibility for Pennsylvania state financial aid programs. Other 529 plans are. If you or the beneficiary is not a Pennsylvania resident, check with your state to determine its requirements.
Federal financial aid – If the account owner is a custodial parent, up to 6 percent of the money in a 529 account may be considered available for college expenses.
Be sure to check with the schools you are considering regarding their criteria for financial aid.
No. PA 529 accounts have no minimum deposit requirement, making them accessible and convenient for families of any income level. Once your account is open, you may contribute any amount and also set up automatic contributions from your bank or paycheck.
No. There is no maximum age for a 529 plan. Assets may be used at eligible schools offering adult career training or advanced degrees, including part-time programs.
No. PA 529 accounts can be opened online or by mail, and customer service representatives are available to answer any questions you may have. Check out our webinars to learn more about opening and saving in a PA 529 account.
Eligible Education Expenses
Withdrawals from your PA 529 account are tax-free when used to pay qualified education expenses. These expenses are defined by the Internal Revenue Code to include the following:
Qualified K-12 Education Expenses
- Tuition up to $10,000 per year, per beneficiary at an elementary or secondary public, private, or religious school.
Qualified Higher Education Expenses
As defined by the Internal Revenue Code, qualified higher education expenses include:
- Tuition
- Room and board (as specified in the college's cost of attendance; must be at least a half-time student)
- Required books
- Required supplies
- Required equipment, including computers*
- Mandatory fees
- Special needs services
- Principal and interest on a qualified education loan for a PA 529 beneficiary or sibling up to $10,000.
* Must be used primarily by the beneficiary during any of the years the beneficiary is enrolled at an eligible educational institution.
Apprenticeship Programs
Use your PA 529 account to pay for fees, books, supplies, and equipment required for the participation of a designated beneficiary in a registered and certified apprenticeship program.* Visit apprenticeship.gov to learn more.
* Only expenses for fees, books, supplies, and equipment required for the participation of a designated beneficiary in a registered and certified apprenticeship program are considered qualified higher education expenses.
No. The money in your PA 529 account may be used at any eligible higher education institution in the United States and abroad that qualifies under federal guidelines. This includes most public and private colleges and universities, graduate and postgraduate schools, community colleges and certain proprietary and vocational schools. To search for eligible schools, go to studentaid.gov.
For registered and certified apprenticeship programs, the money in your PA 529 account may be used to pay for required fees, books, supplies, and equipment. The apprenticeship program must be registered and certified with the U.S. Secretary of Labor under Section 1 of the National Apprenticeship Act (29 U.S.C. 50). Visit apprenticeship.gov to learn more.
Nearly all colleges, universities, community colleges, and law, medical or business schools qualify. Many career or technical schools and schools abroad are eligible as well. The school must be eligible to participate in federal financial aid programs. To search for eligible schools, go to studentaid.gov.
Yes. You may use a PA 529 account to pay for expenses for tuition in connection with enrollment or attendance at an elementary or secondary public, private, or religious school up to $10,000 per year, per beneficiary. Please note qualified withdrawals from the PA 529 GSP are made using a “first in – first out” basis, meaning your oldest contributions (and any associated growth) are the first to be withdrawn.
Yes. The amount of qualified distributions from a PA 529 account for the same beneficiary during any taxable year cannot exceed $10,000.
Yes, within limits. Account owners can treat qualified K-12 withdrawals, up to $10,000 per beneficiary per year, as qualified expenses with respect to the federal and Pennsylvania state income tax benefits.* For more information, account owners should consult the Pennsylvania Department of Revenue at revenue.pa.gov or by calling 717-787-8201 or consult a qualified tax advisor about your personal situation.
*The availability of tax or other benefits may be contingent on meeting other requirements. The earnings portion of a withdrawal not used to pay for qualified expenses may be subject to federal income tax and a 10% federal penalty tax; the entire withdrawal may be subject to state and local income taxes.
Contributions
Anyone – parents, grandparents, aunts, uncles – even family friends.
There is no minimum initial or subsequent contribution amount for either PA 529 plan. Contributions can be made by:
- Checks and money orders
- You may mail a check to the PA 529 plan’s processing center. Please make the check payable to the appropriate plan and include the PA 529 account number and beneficiary’s name in the memo line.
- Electronic bank transfer (one-time)
- Automatic Investment Plan (recurring)
- Payroll deduction (recurring)
- Ugift
- Rollover from another 529 Plan or Coverdell Education Savings Account
Yes. PA 529 makes it easy to automate your education savings with an Automatic Investment Plan or payroll deduction.
Automatic Investment Plan – Automatic investing lets you choose to have contributions deducted automatically and regularly from a savings or checking account.
Access your account or use the Automatic Investment Plan/Electronic Bank Transfer Form to start, change or stop automatic bank transfers or to change bank information.
Remember to review your account regularly and reconsider the contribution amount if family financial circumstances change.
Payroll Deduction – Many employers let you set up a payroll deduction into your PA 529 account. This is a great way to save by having a pre-arranged amount deducted from your paycheck (after taxes) and deposited into your PA 529 account.
Access your account and click on “Payroll Deduction” or download and complete a Payroll Deduction Instruction Form. After we process your information, you will receive a confirmation statement, which you must sign and submit to your employer's payroll department so they can begin making payroll deductions.
If you're opening a new PA 529 account, be sure to indicate that you would like to establish payroll deduction and provide the necessary information.
If your employer does not offer a PA 529 payroll deduction, please contact our customer service staff at 800-440-4000 for help.
Contributions of as little as $1 can be made any time with the exception of contributions made by Ugift, which must be at least $25.
Pennsylvanians can send state tax refunds directly to a PA 529 College and Career Savings account. You can contribute all or part of your Pennsylvania state income tax refund directly to one or multiple existing PA 529 College and Career Savings Program accounts.
When completing your PA-40, Personal Income Tax Return, enter code H and the amount in the donation section between lines 32-36. Additionally, submit a PA-Schedule P with your return when donating to one or more Pennsylvania 529 College and Career Savings Program accounts. More information is available in the PA-40, Personal Income Tax Return Instructions. Visit Revenue.pa.gov to learn more.
Rollovers
You can roll over funds for the same beneficiary only once per 12 consecutive month period. If you change the beneficiary to a family member of the current beneficiary, however, there is no limit on how often you can roll over an account.
You can roll over funds from your existing 529 account into a PA 529 plan by first opening a PA 529 account and completing the Incoming Rollover Form for the appropriate Pennsylvania plan. PA 529 will then request the funds from the other program. If you have already closed your other account, you can send the proceeds from the rollover with a copy of your Enrollment Form and a breakdown of the principal and earnings of the rollover.
A rollover from a non-PA 529 account to a PA 529 account, if done within the rules and received by PA 529 within 60 days of the withdrawal, will not be taxed by Pennsylvania or the federal government at the time of the rollover. When the account is used, the normal rules governing withdrawals would apply. You should check with your other plan to see if they charge any penalties for rolling funds out of their account to another 529 plan. For out-of-state residents and for people who have previously completed rollovers for the same beneficiary, you should check with your tax advisor for additional considerations. Additionally, an amount rolled over from another 529 plan cannot be deducted from taxable income for Pennsylvania taxpayers, as most other contributions can be.
You can roll over funds from an existing UTMA/UGMA account into an existing PA 529 account, but it is important to note that the PA 529 account will then have the additional restrictions applicable to the UTMA/UGMA account. Another alternative is to open a second PA 529 account exclusively for the UTMA/UGMA rollover. By keeping UTMA/UGMA and other contributions in separate accounts, the restrictions on UTMA/UGMA would not apply to funds in the non-UTMA/UGMA 529 account. You should review the appropriate disclosure statement as it relates to UTMA/UGMA accounts before making this transaction.
Yes. Account owners can roll over 529 college savings accounts to ABLE plans, up to the ABLE annual contribution limit (currently $18,000). Please note that you may process a rollover from a 529 college savings account into a PA ABLE account owned by you or a member of your family (as defined in the PA 529 GSP and PA 529 IP disclosure statements). Additionally, in order for the rollover to be protected from federal and state taxes, we must receive the funds within 60 days of the withdrawal.
In order to roll savings bonds into a 529 plan as a tax-deferred event, for federal tax purposes, the bonds have to meet the following requirements:
- • Must be a Series EE bond issued after 1989 or a Series I bond.
- • The bond must be issued either in your name (as the sole owner) or in the name of both you and your spouse (as co-owners). If the bond is for a child, the child may not be listed as the owner or co-owner – they can be the beneficiary of the bond.
- • The owner must be 24 years old before the bond's issue date.
- • The bonds must be used for the owner, the spouse of the owner, or a dependent for whom you can claim an income tax exemption on your federal return. If the grandparent is the owner, they will not qualify unless they can claim the beneficiary.
- • If married, you must file a joint tax return.
- • You must meet the following income requirements:
-
- • Single making less than $83,200
- • Single phases out from $83,200 to $98,200
- • Married making less than $124,800
- • Married phases out from $124,800 to $154,800
If all of the requirements above are met, you must do the following to roll your savings bond into your PA 529 account:
- Record the serial number, issue date, face value and total redemption proceeds (principal and earnings). You'll need this information for your IRS Form 8818.
- Cash your bond at any bank or financial institution.
- Make the payment to your PA 529 account and send it to the plan with a letter stating it is for a Savings Bond rollover. Include a statement or Form 1099-INT from the bank/institution to show the principal and earnings.
For current income limitations and additional information on the Education Savings Bond Program please review IRS Publication 970 (Tax Benefits for Education).
Yes, PA 529 Account Owners are permitted to transfer funds via direct rollover from a PA 529 GSP or PA 529 IP account into a Roth Individual Retirement Account (Roth IRA) without incurring federal income tax or penalties. Details about 529 to Roth IRA rollovers are available here.
To initiate a PA 529 to Roth IRA rollover, Account Owners must use the Direct 529 to Roth IRA Rollover Form which are available on our forms page.
PA 529 Guaranteed Savings Plan (GSP)
You may enroll online, complete an Enrollment Form, or call 800-440-4000 to request an enrollment kit.
The PA 529 GSP is a tax-advantaged and lower-risk 529 plan where account growth on contributions is based on postsecondary tuition inflation at a Tuition Level you choose.
With the PA 529 GSP, if you save enough to pay for a semester of college at one Tuition Level today, you are guaranteed to have enough to pay for a semester of college at the same Tuition Level in the future. (Restrictions apply. See the PA 529 GSP Disclosure Statement for details.)
Any U.S. citizen or resident alien with a valid Social Security number or taxpayer identification number who is 18 years of age or older with a permanent address that is not a PO Box may open a GSP account. A corporation, non-profit organization or trust may also open an account. It is important to note that either the account owner or the beneficiary needs to be a Pennsylvania resident at the time the account is opened.
A subsequent change of residency does not affect the Account.
The beneficiary is the person for whom the account owner is saving. Anyone, including the account owner, can be a beneficiary. Only one beneficiary may be designated per account, but an individual may be the beneficiary of more than one account. It is important to note that either the account owner or the beneficiary needs to be a Pennsylvania resident at the time the account is opened.
A subsequent change of residency does not affect the Account.
There is no enrollment fee or minimum amount required to open a PA 529 account and contributions as low as $1 may be made any time.
The PA 529 GSP has an annual account maintenance fee based on the value of your account to cover the costs of administering the plan, including such expenses as investment management costs, processing functions (e.g., opening and closing accounts, processing transactions, sending confirmations and account statements), operating the GSP call center and staffing costs.
The current fee is 0.40% of the value of your account if used for qualified expenses (with an annual cap of $500). You can reduce your fee to 0.30% (with an annual cap of $250) by selecting to receive all account statements and notices via email.
The fee is automatically deducted from your account at the end of each calendar quarter. On that date, one fourth of 0.40% (or 0.10%) or 0.30% (0.075%) of the value of your account is deducted and a corresponding number of GSP Credits is subtracted.
The dollar amount deducted and the corresponding number of GSP Credits subtracted from your account are shown on your quarterly statement under the entry "Account Maintenance Fee." To keep the fee from affecting your account value and the number of GSP Credits in your account, simply make a contribution in the same amount as the fee. Doing so will restore your account to its status before the fee was taken.
The PA 529 GSP helps you know how much you need to save, and how close you are to your goal, by having you choose a Tuition Level when you enroll. A Tuition Level is the school or type of school for which you are saving. Choosing a Tuition Level helps you measure your progress when comparing the costs of one type of school to another.
You may change your Tuition Level and Enrollment Status online by logging in to your PA 529 Guaranteed Savings Plan account or by calling customer service at 800-440-4000.
Once you have logged in to your account, select your student's GSP account and follow these steps:
- Click on "Change Your Tuition Level"
- On the first screen, select the average Tuition Level or the specific Pennsylvania publicly funded school to which you wish to set your account. (Note: You may not need to make a change on this screen if your beneficiary is attending the school your account is currently set at or is going to a private or out-of-state school.)
- Depending on your previous selection, you may need to determine if your beneficiary is in-state, out-of-state, in-district, or out-of-district. (Note: This screen will be skipped if you are saving at the private four-year or Ivy League average.)
- If your beneficiary is going to a private or out-of-state school, you will need to find their "non-participating institution" by typing the school name (or a portion of the school name) and clicking the "Search" button and selecting the appropriate location. If your beneficiary is attending a Pennsylvania publicly funded school (one that we have a Tuition Level for) you will simply want to skip this screen. (Note: “non-participating institution” simply means that the school is not a Pennsylvania publicly funded institution.)
- Confirm your student’s Tuition Level and click “Submit”.
After you have updated your Tuition Level and/or school of attendance you will be brought back to the main account screen and will need to update your student’s “Enrollment Status”.
To update your student’s Enrollment Status, click on the “View Profile & Documents” link from the left-hand menu to access account profile options and follow these steps:
- Click on the “Beneficiaries” link from the left-hand menu to access your student’s information and click “Edit”.
- Change the “Expected Withdrawal” setting to “Yes” and click “Next”.
- Verify your changes and click “Submit”.
After you have updated your student’s school of attendance and Enrollment Status, your account will be ready to make online qualified withdrawal requests or allow you to download a Payment Authorization Form to process a paper request. (Note: All requests for qualified withdrawals must include a copy of the student’s tuition bill.)
When using your PA 529 GSP to pay for higher education, if your student is attending a Pennsylvania publicly funded school, the GSP Tuition Level may be changed to match the school your student will be attending.* By making sure that your Tuition Level matches the public school being attended, you ensure that you will receive the account value to which you are entitled.
For a detailed explanation of the withdrawal process, view the "Using Your Pennsylvania 529 Guaranteed Savings Plan Account" webinar, available here.
Payments from a PA 529 GSP account may be requested online or by mailing or faxing a form. You can direct payments to yourself or the student by ACH debit to a bank account or you may send payments directly to the school or a third party such as a landlord.
For all qualified withdrawals, a copy of the student’s itemized tuition bill is required.
*Note: If you are a PA 529 Guaranteed Savings Plan account owner and plan to use your account to pay for qualified K-12 expenses or qualified student loan repayment expenses, please call our customer service center at 800-440-4000.
Online qualified withdrawals. The quickest and easiest way to have your payment made is to make an online payment request. Please note that you will need to upload an electronic copy of the student's itemized tuition bill to your request. You can make an online request only if no other payment request has been processed for the same semester (either online or by mail/fax). Online requests that are in good order will be paid in approximately 5-7 business days.
If your student is attending a Pennsylvania publicly funded school (see table for Pennsylvania publicly funded schools), the GSP Tuition Level may be changed to match the school your student will be attending. If it does not, you should change your Tuition Level. By making sure that your Tuition Level matches the school being attended, you ensure that you will receive the full benefit of the PA 529 GSP to which you are entitled. If your student is attending a private or out-of-state school, your payment will be made at your current Tuition Level (which you may change at any time).
Paper qualified withdrawals. To make a payment request by mail or fax, you must complete and submit a Payment Authorization Form (PAF). You may download a PAF and one may be automatically mailed to you (alternatively a link to the PAF may be emailed to you, depending upon your delivery option) each fall and spring semester until your account has a zero balance. In order to download or be sent a PAF, you must first advise the PA 529 GSP of your intent to use your account and the school your student will be attending.
You may email, fax or mail your PAF with a paper copy of the student's itemized tuition bill. Requests that are in good order may take up to 14 business days to be processed.
Pennsylvania Publicly Funded Schools
State System of Higher Education
- Bloomsburg
- California
- Cheyney
- Clarion
- East Stroudsburg
- Edinboro
- Indiana
- Kutztown
- Lock Haven
- Mansfield
- Millersville
- Shippensburg
- Slippery Rock
- West Chester
State-Related Universities
- Pennsylvania College of Technology
- Pennsylvania State University
- Temple University
- University of Pittsburgh
Community Colleges
- Allegheny County
- Beaver County
- Bucks County
- Butler County
- Delaware County
- Harrisburg Area
- Lehigh-Carbon County
- Luzerne County
- Montgomery County
- Northampton County
- Pennsylvania Highlands
- Philadelphia
- Reading Area
- Westmoreland Area
For more details about qualified withdrawals. See the relevant parts of the PA 529 GSP Disclosure Statement – particularly Part 1.A, "What schools and what expenses can an Account be used for"; Part 2.C.4, "Tuition Inflation Value"; and Part 2.D.2, "Qualified Withdrawals."
Note: If you are a PA 529 Guaranteed Savings Plan account owner and plan to use your account to pay for qualified K-12 expenses or qualified student loan repayment expenses, please call our customer service center at 800-440-4000.
Generally, you can request payment as soon as you receive the itemized tuition bill. However, if your student is attending a private or out-of-state post-secondary school, there may be a wait for fall semester payments, depending on the Tuition Level at which you are seeking payment. Fall Payment Authorization Forms and online withdrawal requests are not available until the schools in your Tuition Level have set and certified their tuition rate for the upcoming academic year. Generally, the Private Four-year College Average and the Ivy League Average Tuition Levels are available for payout by July. Payouts for other Tuition Levels might not be available until the end of July. If your bill is due before the fall Payment Authorization Form or online withdrawal is available for your Tuition Level, please call customer service at 800-440-4000 for additional options.
After you have updated the school of attendance for your beneficiary and Enrollment Status, you can obtain a Payment Authorization Form (PAF) online by accessing your account. There you will see a link that says “Make a Withdrawal” and an option to make a qualified withdrawal using the Payment Authorization Form. Click the “Next” button and confirm the semester and year, then click “Generate PAF”.
The Program will automatically send you a Payment Authorization Form via mail or a link to the Payment Authorization Form via email depending on your delivery options each fall and spring semester until your account has a zero balance.
Once you have the Payment Authorization Form, you need to complete the applicable sections for your withdrawal. Each section will be labeled for a payment to the Account Owner, the school of attendance, or an optional payee such as the beneficiary or a landlord. Please only complete the sections for which you wish to make a payment and to whom you want the payment to go.
You must also include a copy of the student's itemized tuition bill.
You can fax your completed request to 617-559-2456 or mail it to:
PA 529 Guaranteed Savings Plan
P.O. Box 55463
Boston, MA 02205
Please note that requests in good order may take up to 14 business days to process. For faster processing, please submit your request online by logging in to your account.
Contributing before August 31 of each year may be a significant benefit. Because tuition inflation is ordinarily applied on September 1, contributions made by August 31 receive tuition inflation on September 1. While contributions must be held approximately one year before they and their growth can be used, a contribution made by August 31 of one year can be used as early as for the Summer semester of the next calendar year and receive the benefit of one year of tuition inflation, or for the Fall semester of the next calendar year and receive the benefit of two years of tuition inflation.
Each time you contribute, those dollars are divided by the current GSP credit rate for the Tuition Level you've selected, and the number of GSP credits accumulates. For most four-year colleges, 96 GSP credits will cover four years of tuition; for community colleges, you would generally need 60 GSP credits for an associate degree. For example, if you saved enough for six GSP credits each year at one Tuition Level, in 16 years you would have 96 GSP credits at that Tuition Level – enough to cover four years of tuition on average. Some GSP credit rates may include a premium to make sure the fund can meet its obligations. See current GSP Credit Rates for each Tuition Level.
When you use your account for qualified expenses, the growth on your contributions is based on postsecondary tuition increases, not on the GSP Fund's investment performance. The Tuition Level when your account is used (pay-out Tuition Level) determines your account value. For more information about the guarantee and how your account grows, please read the PA 529 GSP Disclosure Statement.
PA 529 Investment Plan (IP)
You may enroll online, complete an Enrollment Application, or call 800-440-4000 to request an enrollment kit. You may also enroll using the READYSAVE 529™ app.
The PA 529 IP allows families to choose from several investment options, including target enrollment date portfolios, from Vanguard, one of America's largest financial service companies.
PA 529 IP returns are never guaranteed, and your account value will fluctuate with financial market performance. As with any investment in securities, you can lose money by investing in the PA 529 IP. Keep in mind that the holding period for college investors is short (generally 5 to 20 years), and you should consider investing more conservatively as the time approaches for you to begin making withdrawals. Before you select an investment option, carefully consider your investment time horizon and risk tolerance.
The PA 529 IP offers the following investment options:
- Target enrollment date investment option, which allows families to select a portfolio based on when they plan to use their PA 529 account. Families can select the portfolio that most closely matches their beneficiary’s projected enrollment date. Each portfolio will automatically adjust its asset allocation from more equity investments to more conservative holdings as the student prepares to start their school or program.
- 14 individual portfolios, including a socially responsible portfolio. Choose from a variety of bond, and short-term reserves in which the allocations remain constant and invested in the same portfolios until you tell us otherwise.
Click here to find current PA 529 IP pricing and performance. For complete details, please read PA 529 IP Disclosure Statement.
You can change the direction of your future contributions at any time.
You can change previous contributions from one investment option to another twice per calendar year or at any time you change the beneficiary (Note: the investment option change must take place at the same time as the beneficiary change).
To make a qualified or non-qualified withdrawal, you may either make an online withdrawal request or complete a Withdrawal Request Form.
Payments from a PA 529 IP account may be requested online or by mailing or faxing a form. You can direct payments to yourself or the student by ACH debit to a bank account or you may send payments directly to the school or a third party such as a landlord
For a detailed explanation of the withdrawal process, view the "Using Your Pennsylvania 529 Investment Plan Account" webinar, available here.
ACSR is the record keeper and servicing agent for the Pennsylvania 529 Investment Plan.
Your PA 529 Account
You have several options if your child does not pursue education.
One option is doing nothing, there are no time limits or mandatory withdrawal requirements, so you can maintain your account if your child does not pursue education immediately after high school.
Another option is processing a rollover from your PA 529 GSP or PA 529 IP account into a Roth Individual Retirement Account (Roth IRA). Details about 529 to Roth IRA rollovers are available here.
You may also change the beneficiary on the account to a member of the family* of the original beneficiary or transfer funds from the 529 account into the account of another, related beneficiary.
Additionally, at any time for any reason, you can take a non-qualified withdrawal. Non-qualified withdrawals have certain tax implications and for a PA 529 GSP account, the valuation of the account may vary. For more information related to non-qualified withdrawals, please refer to the appropriate plan disclosure statement.
Member of the Family
As defined under Section 529 of the Internal Revenue Code, a member of the family of a beneficiary is a person related to the beneficiary as follows:
- son or daughter, or a descendent of either
- stepson or stepdaughter, or a descendent of either
- brother, sister, stepbrother, or stepsister
- father or mother, or an ancestor of either
- stepfather or stepmother
- son or daughter of a brother or sister
- brother or sister of the father or mother
- son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law or sister-in-law
- spouse of the beneficiary or of any of the foregoing individuals
- first cousin
For this purpose, a child includes a legally adopted child or a foster child, and a brother or sister includes a brother or sister by half-blood.
Information regarding your account is confidential and will not be released, even to your spouse, beneficiary or successor. If you wish, you may allow individuals such as your spouse or financial advisor to be an Authorized Agent, giving them one of four levels of access:
Authorized Agents
A person or entity authorized by the account owner to access account information and/or act on his or her behalf. Authorized Agents may have four different levels of permissions, ranging from access to account information to the ability to change account owners and beneficiaries.
- Level 1: Access information and account statements only.
- Level 2: Level 1 plus permission to make electronic contributions, change Tuition Levels (for the GSP), and move money among investment options (for the IP).
- Level 3: Level 2 plus permission to make distributions from the account.
- Level 4: Full control including changing the account owner or beneficiary.
For questions, or to designate a Level 1 Authorized Agent, call Customer Service at 800-440-4000. For Level 2 or 3, you must complete the Limited Power of Attorney/Agent Authorization form (GSP | IP). Level 4 requires a Power of Attorney form (GSP | IP). Forms for Levels 2-4 must be notarized. Permissions may be changed or revoked at any time in writing for Levels 2-4, or over the phone for Level 1.
An aggregator is a service that gathers information from multiple sources and displays it in one location. Examples include CashEdge, Personal Capital, and Mint. You can grant aggregators access to financial information found, for example, in your bank, credit card, and 529 accounts. Aggregators will then collect the information to which you have granted them access and allow you to view it on their respective websites.
Aggregators require you to provide them with your login and password information so that they can collect your financial information. This can create significant security risks.
The PA 529 College and Career Savings Program allows you to provide aggregators a unique username and password different than the login information that you use to access your online account.
To establish access for an aggregator, follow these steps:
- Log in to your account here.
- Select “Profile & Documents”
- Select “Password & Security Features”
- Under “Manage Financial Aggregator Access,” select “Edit”
- Create password and copy new aggregator URL for your PA 529 account.
- Visit your aggregation service provider to provide the new URL and login credentials so that the aggregator can continue to access your PA 529 account
Please note that aggregators are optional services and are not affiliated with the Commonwealth of Pennsylvania, the Pennsylvania Treasury Department, or PA 529.
Access to your PA 529 online account is protected using two-factor authentication. Two-factor authentication is a security process which provides an extra level of account security by asking account owners to verify they are who they say they are. This makes it more difficult for hackers to gain access to your account(s), because knowing your password by itself is not enough to pass the authentication check. You may read more about two-factor authentication here.
Each time you log in to your account, you will be required to enter a one-time-use PIN to verify your identity. To simplify sign-in, you may select a trusted device for future sign-ins. Once you have designated the trusted device, your future logins will no longer require you to enter a code each time you sign-in.
You may obtain a one-time-use PIN in one of three ways:
- • Receiving a Text Message (most convenient). Account owners are encouraged to update their account profile with a text-enabled mobile phone number for easy self-service.
- • Receiving a Phone Call. Account owners may receive an automated phone call 24 hours per day to the number listed on their PA 529 account.
- • Contacting PA 529 by Phone. Account owners may call PA 529’s customer service line. This option is only available during normal business hours (Monday – Friday | 8:00 a.m. – 5:00 p.m. EST).
You may update your PA 529 account when logged in or by calling 800-440-4000.
Yes. You can access the funds in your account at any time for any reason.
A withdrawal used to move your funds to another 529 plan is called a "transfer" (if from the GSP to the IP or vice versa) or "rollover" (if to another state's 529 plan). A withdrawal for any reason other than paying for qualified expenses is called a "non-qualified withdrawal." There are several factors to consider prior to making a transfer, rollover, or non-qualified withdrawal:
- If made from a PA 529 GSP account, the growth on contributions used for these types of withdrawals is calculated differently and often is less than growth on contributions used for qualified withdrawals.
- There may be federal and state income tax consequences.
- The number of transfers, rollovers and non-qualified withdrawals that may be taken in a given period of time may be limited. See the appropriate Disclosure Statement for more information.
You can request most non-qualified withdrawals online by logging into your account and clicking on the "Account Management" link and then "Make a Withdrawal." Simply follow the withdrawal flow for the appropriate non-qualified withdrawal type. You may also request a non-qualified withdrawal in writing by submitting a signed letter of instruction, with any necessary documentation, to our processing center. You may fax or mail your request to our office.
To request a transfer, simply send us a signed letter of instruction detailing your request.
Non-qualified withdrawals processed online may take 5-7 business days to complete, and withdrawals completed by paper may take 14 business days to complete.
Sage Scholars Tuition Rewards (SAGE) is a free scholarship program that helps families earn Tuition Reward Points that reduce the cost of undergraduate tuition at participating private colleges and universities.
Each quarter you earn Tuition Rewards equal to 2.5% of the value of your PA 529 account – adding up to approximately 10% per year. Each point is worth $1.00 in scholarships at SAGE member schools. Learn more at tuitionrewards.com.
Tuition Rewards costs nothing to join. It's easy to get started – just sign up when you open your PA 529 account. To track your SAGE Rewards, to get more information, and to receive a 500-point bonus, register and visit your account at tuitionrewards.com. You'll get another 500-point bonus for each child that has a PA 529 account.
SAGE Scholars' Tuition Rewards is an optional service, separate from PA 529, and not affiliated with the Commonwealth or the Treasury Department. Specific terms and conditions apply. Contact Support@SAGEscholars.com for more information.
