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Indiana529 Direct Savings Plan
P.O. Box 219418
Kansas City, MO 64121

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Indiana529 Direct Savings Plan
1001 E 101st Terrace, Suite 200
Kansas City, MO 64131

 
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Withdrawals

Your 529 savings can be used for much more than just tuition! Qualified expenses include tuition, fees, certain room and board costs, books, computers and course-related software, supplies, and equipment. And don't forget, those expenses don't have to be incurred at a traditional 4-year college - it can be for 2-year college, vocational or trade school, registered apprenticeships, or even K-12 tuition at schools within in Indiana.

No. You can use the assets in your account at any eligible school in the country and abroad. That includes 2- and 4-year colleges, graduate schools, eligible apprenticeships, and vocational/technical schools.

There is no time limit on when you can use the savings in your Indiana529 Direct account - so if your child is still deciding their next steps, or taking a gap year, your savings will still be there when they're ready. If the child decides not to pursue any form of higher education, you still have three options:

  1. Stay invested. You can leave the money in the account in case the beneficiary decides to attend school later.
  2. Change the beneficiary. You can change the beneficiary on your account as long as the new one is an eligible member of the family of the former beneficiary.3
  3. Withdraw the money for other uses. Remember - the money is always yours. If you do need to take a non-qualified withdrawal, the earnings portion is subject to federal and state income taxes and may be subject to a 10% federal penalty tax. For exceptions to this penalty, please consult the Disclosure Booklet.

529 plan assets are counted at different rates for the Student Aid Index (SAI) in the FAFSA formula. Federal guidelines are as follows:

  1. If the student is a dependent, a 529 plan account is considered as the parent's asset (if the account owner is the parent or the dependent student). As a result, it will generally be counted at a rate of only 3-6% of its value for the EFC.
  2. If the student is not a dependent and is the account owner, the 529 plan account is treated as the student's asset and is generally factored into the EFC at the higher rate of 20%.
  3. In other cases, the account does not count as an asset for federal financial aid purposes. (However, a student may have to report distributions received from the account as income for these purposes.)
    • Beginning with FAFSA applications for the 2024-2025 academic year, as part of the Consolidated Appropriations Act, distributions from a non-parent-owned 529 accounts will no longer need to be reported as the student’s taxable income on the FAFSA.

Note: Financial aid programs offered by educational institutions and other non-federal sources may have their own guidelines for the treatment of 529 plan accounts. For complete information about financial aid eligibility, you should consult with a financial aid professional and/or the state or educational institution offering a particular financial aid program, since rules and regulations often change.

1Earnings on non-qualified withdrawals may be subject to federal income tax and a 10% federal penalty tax, as well as state and local income taxes. Tax and other benefits are contingent on meeting other requirements and certain other withdrawals may be subject to federal, state, and local taxes.

2In the event the donor does not survive the 5-year period, a pro-rated amount will revert back to the donor's taxable estate.

3Section 529 defines a family member as: a son, daughter, stepson or stepdaughter, or a descendant of any such person; a brother, sister, stepbrother, or stepsister; the father or mother, or an ancestor of either; a stepfather or stepmother; a son or daughter of a brother or sister; a brother or sister of the father or mother; a son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law; the spouse of the beneficiary or the spouse of any individual described above; or a first cousin of the beneficiary. Gift or generation-skipping transfer taxes may apply. Please consult with your tax advisor for further information.

4A plan of regular investment cannot assure a profit or protect against a loss in a declining market.

5Upromise® is an optional program offered by Upromise®, LLC, is separate from Indiana529 Direct Savings Plan, and is not affiliated with the State of Indiana. Terms and conditions apply to the Upromise® program. Participating companies, contribution levels, and terms and conditions are subject to change at any time without notice. Transfers from Upromise® to an Indiana529 Direct account are subject to a $50 minimum and do not count towards the Indiana state tax credit.

6 Indiana taxpayers are eligible for a state income tax credit of 20% of contributions to an Indiana529 Direct Savings Plan account, up to $1,500 credit per year ($750 for married couples filing separately). This credit may be subject to recapture from the account owner (not the contributor) in certain circumstances, such as rollovers to another state's 529 plan, federal non-qualified withdrawals, withdrawals used to pay elementary or secondary school tuition for a school outside of Indiana, education loan repayments, or rollovers to a Roth IRA account, as described in the Disclosure Booklet.