Utah My 529 (formerly UESP)
Utah My 529, formerly known as the Utah Educational Savings Program (UESP), is a state-sponsored 529 college savings plan designed to help families save for higher education expenses. The program allows contributors to invest in tax-advantaged accounts, with earnings growing tax-free when used for qualified education expenses.
Key Features of Utah My 529
- Tax Advantages: Earnings grow tax-deferred, and withdrawals for qualified education expenses are federal and Utah state tax-free.
- Flexible Use: Funds can be used for tuition, books, supplies, room and board, and other qualified education expenses at eligible colleges and universities.
- Investment Options: A variety of investment portfolios are available, allowing account owners to choose based on their risk tolerance and time horizon.
- Gift and Estate Planning: Contributions can be made as gifts, and the account owner retains control over the account, including the ability to change the beneficiary.
How to Open an Account
To open an account with Utah My 529, you can visit the official website or use the online application provided by the program administrator. You will need to provide personal information, select a beneficiary, and choose an investment option.
Contribution Limits
There are no annual contribution limits set by Utah state law, but contributions are subject to federal gift tax rules. The maximum amount that can be contributed without triggering gift tax is $17,000 per person per year (as of 2023). However, you may contribute up to five years’ worth of gifts in one year ($85,000) if you elect to spread the gift over five years.
Eligible Expenses
Funds from a Utah My 529 account can be used for:
- Tuition and fees
- Books and supplies
- Room and board (if enrolled at least half-time)
- Computers and related technology
- Certified apprenticeship programs
Important Notes
While Utah My 529 offers significant benefits, it’s important to note that non-qualified withdrawals may be subject to federal income tax and a 10% penalty on earnings. Additionally, contributions are not deductible on Utah state income tax returns.
Source:
Form TC-40 Instructions
Form TC-546
Form TC-675R Instructions
Publication 25
Disclaimer: Always verify details with the official Federal or State Department of Revenue Forms and Instructions.