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Frequently Asked Questions

General 
What is IDeal?
How does IDeal work?
How do I open an IDeal account?
How much do I need to open an account?
Who can open an IDeal Plan account?
Who can contribute to a 529?
Who can be a beneficiary?
How can I make contributions to my account?
How do I make a withdrawal from my account?
Do I retain control of the account?
Can I make an investment change in my account?
Can I change the beneficiary of my account?
Are investments in IDeal guaranteed?
What is Ugift® - Give College Savings?
What is Upromise® and how can it help me save for college?
What impact does a 529 plan have on eligibility for federal financial aid?


Taxes
What tax benefits can I get from IDeal?
Are there any special tax benefits for Idaho taxpayers?
What are the Plan's gift- and estate-tax benefits?


Using the assets in your IDeal account
How can I use the money in my account?
What qualifies as a higher education expense?
Can I use the money in my account for Dual Credit courses?
Is paying off a student loan a qualified higher education expense?
Does my beneficiary have to attend college in Idaho?
What if my beneficiary does not go to college immediately after high school?
What if my beneficiary decides not to go to college?



General

What is IDeal?

IDeal is a 529 college savings plan designed to help individuals and families save for college in a tax-advantaged way. It offers advantages including: tax-deferred growth, generous contribution limits, attractive investment options and professional investment management. IDeal is offered by the Idaho College Savings Program Board, with program management by Upromise Investments, Inc. and investment management by The Vanguard Group, Inc. The Savings Portfolio, is managed by Sallie Mae Bank.

How does IDeal work?

When you open an account in IDeal, you choose to invest in either an Age-Based Option (based on your risk comfort level) and in one or more of a range of Fixed Asset Allocation Portfolios and a Savings Portfolio, based upon your investing preferences and risk tolerance. All of the contributions made to your account grow tax-deferred and the distributions are federally and Idaho state tax-free if used for qualified expenses.1

How do I open an IDeal account?

The easiest way is to enroll online. It only takes about 10 minutes. If you prefer to enroll by mail, complete the enrollment form and make an initial investment for the benefit of an individual (the beneficiary). You can open more than one account but each must be for a different beneficiary.

How much do I need to open an account?

It only takes $25 to open an account (by check); $25/month or $75/quarter through AIP2; or $15 with payroll direct deposit, where available. Total of all IDeal accounts for the same beneficiary cannot exceed $350,000.

Who can open an IDeal Plan account?

Any U.S. citizen or resident alien, 18 or older, or an entity that is organized in the U.S., with a Social Security number or Tax Identification number and U.S. street address, can open an account, regardless of income level. Parents, grandparents, other family, and friends can open an account for anyone they choose. You can also open an account to pay for your own higher education.

Who can contribute to a 529?

Any number of people can contribute to the same IDeal account, but total contributions cannot exceed $350,000 for all IDeal accounts for the same beneficiary. (Note: If you contribute to an account owned by someone else you give up all rights to the money.)

Who can be a beneficiary?

Any person of any age (with a Social Security number) can be named as the beneficiary of an IDeal account. As the participant, you can select a child, adult or even yourself as beneficiary.

How can I make contributions to my account?

  • Electronic funds transfer (opening contribution of $25) from your checking or savings account
  • Automatic Investment Plan (AIP)2 with scheduled contributions in set amounts of at least $25 per month or $75 per quarter from your checking or savings account
  • Payroll deduction2 ($15 or more) through participating employers
  • Check (made payable to IDeal - Idaho College Savings Program)
  • Rollover from another 529 plan
  • Rollover from a Coverdell Education Savings Account or a qualified Series EE or Series I U.S. Savings Bond
  • Transfer of cash from an UGMA/UTMA account (Note: consult with a tax advisor as there may be tax consequences)
  • Ugift® - Give College Savings (minimum of $25)
  • Upromise® (minimum of $25)
How do I make a withdrawal from my account?

You may make a withdrawal from an IDeal Account securely online, at any time, and direct the withdrawal amount to the following:

  • Account Owner (by check or by Automated Clearing House (ACH) to an established bank account). Please allow 7 to 10 business days for delivery of the check and 3 to 5 business days for transmittal of the funds by ACH.
  • Beneficiary (by check). Please allow 7 to 10 business days for delivery of the check.
  • Eligible Educational Institution (by check). Please allow 7 to 10 business days for delivery of the check.
More information about making withdrawals

Do I retain control of the account?

Yes. As the participant, you choose the portfolios in which you invest, and you decide when and where the money will be used.

Can I make an investment change in my account?

Yes. You can change the direction of your future contributions at any time. Federal law permits you to move the assets in your IDeal account to a different mix of investment options once per calendar year.

Can I change the beneficiary of my account?

Yes. You can transfer your account to a "member of the family" of the beneficiary without incurring federal income tax or penalties.3

Are investments in IDeal guaranteed?

Contributions to and earnings on the investments in the Savings Portfolio are insured by the FDIC on a pass-through basis to each account owner up to $250,000, the maximum amount set by federal law. No other investments are insured or guaranteed by IDeal. Investment returns will vary depending upon the performance of the Portfolios you choose. Depending on market conditions, you could lose all or a portion of your investment.

What is Ugift® - Give College Savings?

Ugift is an innovative online feature that allows you to invite family and friends to celebrate occasions with gift contributions to your IDeal account. To learn more, click here.

What is Upromise® and how can it help me save for college?

Upromise4 is a free service that helps you save money for college with everyday purchases like shopping, eating out, filling your gas tank, traveling, and more. When you link your Upromise account with your IDeal account, your earnings can be transferred automatically on a periodic basis, subject to a $25 minimum transfer amount. To learn more, click here.

What impact does a 529 plan have on eligibility for federal financial aid?

529 plan assets are counted at different rates for the Expected Family Contribution (EFC) in the FAFSA formula. Current federal guidelines are as follows:

  • 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 5.64% of its value for the EFC.
  • 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%.
  • 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.)

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.

1 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.
2 A plan of regular investment cannot assure a profit or protect against a loss in a declining market.
3 Section 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.
4 Upromise is an optional service offered by Upromise, Inc., is separate from IDeal, and is not affiliated with the State of Idaho. Specific terms and conditions apply. Participating companies, contribution levels, terms and conditions subject to change without notice. 


Taxes

What tax benefits can I get from IDeal?

 Earnings grow tax deferred and are free from federal income tax when used for qualified higher education expenses.1 Qualified higher education expenses include tuition, mandatory fees, books, supplies, and equipment required for enrollment or attendance; certain room and board costs during any academic period the beneficiary is enrolled at least half-time; and certain expenses for a special-needs student.

Are there any special tax benefits for Idaho taxpayers?

Yes. If you are an Idaho taxpayer, you are eligible for a state income tax deduction of up to $4,000 ($8,000 if married, filing jointly) for your IDeal contributions. (Contributions to the IDeal - Idaho College Savings Program are deductible from Idaho state income tax, subject to recapture in certain circumstances, such as a non-qualified withdrawal or a rollover to another state's qualified tuition program in the year of the rollover and the prior tax year.)

What are the Plan's gift- and estate-tax benefits?

Individuals can invest up to $14,000 ($28,000 for married couples) per beneficiary without incurring any federal gift-tax consequences. You can also contribute up to $70,000 per beneficiary in a single year ($140,000 for married couples) and take advantage of five years' worth of tax-free gifts at one time. (Contributions are considered completed gifts and are removed from your estate2, but you, as the account owner, retain control.) Upon the death of the account owner, money remaining in the account will not be included in the account owner's estate for federal estate tax purposes. For more information, consult your tax advisor or estate-planning attorney.

1 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 Statement for more details on qualified expenses.
2 In the event the donor does not survive the five-year period, a pro-rated amount will revert to the donor's taxable estate.



Using the assets in your IDeal account

How can I use the money in my account?

The money in your IDeal account can be used for any purpose. However, to qualify for federal tax-free withdrawals on earnings and avoid penalties, the money must be used for qualified higher education expenses for the beneficiary at an eligible educational institution. 1, 2

What counts as a qualified higher education expense?

Eligible expenses can include tuition, mandatory fees, books, supplies, and equipment required for enrollment or attendance; certain room and board costs during any academic period the beneficiary is enrolled at least half-time; and certain expenses for a special-needs student.1

Can I use the money in my account for Dual Credit courses?

You may use funds from your IDeal account to pay for the costs of Dual Credit courses as well as required books, as long as you are enrolled as a student at the postsecondary institution in which you are obtaining the credit. 

Is paying off a student loan a qualified higher education expense?

No. Repayment of student loans is not considered a qualified higher education expense.

Does my beneficiary have to attend college in Idaho?

No. You can use the assets in your account toward the costs of nearly any public or private, 2-year or 4-year college nationwide, as long as the student is enrolled in a U.S.-accredited college, university, graduate school, or technical school that is eligible to participate in U.S. Department of Education student financial aid programs. In fact, many U.S. colleges and universities now have campuses or locations outside of the country, where money from your account can be used.

What if my beneficiary does not go to college immediately after high school?

The IDeal Plan does not require a child to attend college immediately after graduating high school. There are no restrictions on when you can use your account to pay for college expenses.

What if my beneficiary decides not to go to college?

If a beneficiary decides not to attend college, you have the following options.

  • Stay invested. You can leave the money in the account in case the beneficiary decides to attend school later. There is no age restriction for using the money.
  • Change the beneficiary. You can change the beneficiary on your account at any time provided that the new beneficiary is an eligible "member of the family" of the former beneficiary. Please see the Disclosure Statement for more information on who qualifies.
  • Withdraw the money for other uses. The earnings portion of a withdrawal not used for a beneficiary's qualified higher education expenses is subject to federal and state income taxes and may be subject to a 10% federal penalty tax. For exceptions to this penalty, please see the Disclosure Statement.

Additionally, any accumulated earnings that are withdrawn from your account must also be reported on the recipient's income tax return for the year in which they are withdrawn. Contact your tax advisor to determine how to report a non-qualified withdrawal.

As of December 2, 2013 Upromise Investments, Inc. and Upromise Investment Advisors, LLC are no longer affiliated with Upromise, Inc., Sallie Mae Bank, SLM Corporation, or its affiliates.

1 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.
2 An eligible school is one that is eligible to participate in federal financial aid programs.