Tax Deferred Growth
Tax-free education savings means more potential
With an Indiana529 Plan account, your savings have the potential to grow at a faster rate than if you had invested in a comparable taxable account. The plan offers several tax advantages that can help you save more for education.
This chart shows the potential growth of contributing different amounts monthly over time.
*Chart assumes a hypothetical 6% rate of return compounded monthly and monthly contributions made at the end of each month. This chart is for illustrative purposes and does not represent the return of any specific investment options. Investment returns in a college savings plan will vary and may be higher or lower than this example. This illustration does not include fees and any fees assessed by the investment offering could have an impact on returns.
Indiana Specific Tax
Generous Indiana Tax Credit
Indiana taxpayers can get a state income tax credit equal to 20% of their contributions to a Indiana529 account, up to $1,500 per year ($750 for married filing separately).1
Third party contributors like grandparents, godparents or other family and friends who are also Indiana taxpayers may also be eligible for the state tax credit for contributions to your account.
Tax-Free Withdrawals
Distributions for qualified higher-education expenses are free from federal and Indiana state income tax.2
Gift-Tax Benefits
Contributions to an Indiana529 Direct account qualify for the federal $18,000 annual gift tax exclusion.
Estate Planning Benefits
Reduce your personal taxable estate by making five years' worth of gifts (up to $90,000; $180,000 for married couples filing jointly) in one lump sum.3
1 This credit is subject to recapture from the account owner (not the contributor) in certain circumstances, such as rollovers to another state's 529 plan, federal nonqualified withdrawals, withdrawals used to pay elementary or secondary school tuition for a school outside of Indiana, qualified education loan repayments, or rollovers to a Roth IRA account, as described in the Disclosure Booklet.
2 Earnings on non-qualified withdrawals are subject to federal income tax and may be subject to a 10% federal penalty tax, as well as state and local income taxes. The availability of tax or other benefits may be contingent on meeting other requirements. See the Disclosure Booklet for more details on qualified expenses.
3 In the event you do not survive the five-year period, a pro-rated amount will revert back to your taxable estate.
Webinar Wednesdays
Join us on Wednesdays to learn the basics of saving for education with Indiana529.
Additional Resources
Learn More about Tax Advantages
Find further information about the federal and state tax benefits of Indiana529 Direct
Plan Disclosure Statement
Review the complete details about Indiana529 Direct and the tax benefits that may be available to you.
Go to Plan DisclosureIndiana Tax Information
Visit the Indiana Department of Revenue for more state tax information.
Go to in.gov/dor
