Tax Advantages

CollegeInvest college savings plans offer unique Colorado state and federal tax benefits that aren’t offered in any other types of saving vehicles.

• State Tax Deduction – CollegeInvest offers the only plans which allow Colorado residents to take a state income tax deduction on every dollar they contribute to their CollegeInvest plan.¹
• Tax Deferred Growth – Earnings in a CollegeInvest college savings plan grow state and federal tax deferred .²
• Tax Free Withdrawals – Withdrawals are tax free when used for qualified educational expenses such as certain room and board, tuition and books at eligible colleges and vocational/trade schools nationwide.²
• Beneficiary changes - Account holders are allowed to change the beneficiary to another family member at anytime without a tax penalty.³
• No Income Limitations – Certain savings plans have income limitations. 529 plans can be used by any individual or resident alien with a social security number or taxpayer identification number and a permanent U.S. address, regardless of income level.
• Gift Tax Provisions – With the special gift tax election, you can contribute up to $65,000 per person or $130,000 per married couple, per beneficiary, in a single year, without incurring a federal gift tax impact. That’s five times the annual gift tax exclusion.⁴
• Non-qualified withdrawals – In the case of withdrawals being used for expenses other than qualified higher education expenses, only earnings are subject to a 10% penalty as well as standard state and local income taxes.

 ¹ Contributions to the Plan(s) are deductible from Colorado state income tax in the tax year of the contribution , up to your Colorado taxable income for that year.  Such deductions are subject to recapture in subsequent years in which non-qualified withdrawals are made.
 ² The earnings portion of a non-qualified withdrawal is subject to federal income taxes and any applicable state income tax, as well as an additional 10% federal penalty tax.
 ³ Restrictions apply. Please see the Plan Disclosure Statements.
 ⁴ Contributions between $13,000 and $65,000 made in one year can be prorated over a five-year period without incurring federal gift taxes or reducing your unified estate and gift tax credit. If the account owner dies before the end of the five-year period, a prorated portion of the contribution will be included in his or her taxable estate. If you contribute less than the $65,000 maximum, additional contributions can be made without incurring federal gift taxes, up to a prorated level of $13,000 per year. Federal gift taxation may result if a contribution exceeds the available annual gift tax exclusion amount remaining for a given student in the year of contribution.

Important Considerations

To learn about CollegeInvest’s 529 program, its objectives, risks, charges, expenses, limitations, restrictions and qualifications regarding the Plans’ benefits and potential tax advantages, please read and consider carefully the Program Disclosure Statements (PDS) available at www.collegeinvest.org before investing. Also, check with your or your beneficiary’s home state to learn if it offers tax or other benefits for investing in its own plan. Administered and issued by CollegeInvest.

CollegeInvest and the CollegeInvest logo are registered trademarks of CollegeInvest.