Frequently Asked Questions
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 Ascensus Broker Dealer Services, Inc. and investment management by The Vanguard Group, Inc. The Savings Portfolio, is managed by Sallie Mae Bank.
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
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.
IDeal has no commissions, loads, or sales charges. The total annual asset-based fee is 0.50% ($5.00 per $1,000 invested), and there is a $20 annual account fee if neither the account owner nor the beneficiary is an Idaho resident. The fee for the Savings Portfolio is 0.34%.
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.
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.)
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.
- 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)
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.
IMPORTANT: The Account Owner must be listed on the bank account registration to establish bank instructions for withdrawal purposes. Please call us if you have questions regarding whether your bank information is acceptable.
What You Need to Know to Make a Withdrawal
- If you have recently made a contribution in the account, the money you contributed will not be available for withdrawal for seven (7) business days. Additionally, we place a fifteen (15) calendar day hold if bank account information has been newly added or edited. Therefore, withdrawal proceeds requested during this period will be sent after the hold has expired. Please note that there will also be a hold on distribution requests for nine (9) business days when there is a change to the Account Owner's address.
- The earnings portion of a non-qualified withdrawal may be subject to federal income tax and a 10% federal penalty tax as well as state and local income taxes. See the IDeal — Idaho College Savings Program Disclosure Statement for additional information.
- Idaho Taxpayers: If you take a non-qualified withdrawal at any time, the earnings portion of the withdrawal, as well as the contribution portion that you have previously deducted on your Idaho tax return, will be subject to Idaho state taxes. The IRS and the Idaho Department of Revenue may require you to prove that your withdrawal is for Qualified Higher Education Expenses. Check with your tax advisor, or review the instructions for filing your Idaho income tax return, for more information.
- We are required to file an IRS Form 1099-Q when a withdrawal is made from an IDeal Account. Proceeds made payable and sent to the Account Owner will be reported under the Account Owner's Social Security number. Proceeds made payable to and sent to the Beneficiary or an eligible educational institution will be reported under the Beneficiary's Social Security number.
- Payroll direct deposits do not automatically stop when all units of the IDeal Account have been withdrawn. Please contact your payroll office to discontinue the payroll direct deposit plan if you wish for the IDeal Account to remain closed.
- Once a valid withdrawal request has been made, it is irrevocable and may not be modified or canceled. Withdrawals received on any business day prior to the close of business (4 p.m. Eastern time) on the New York Stock Exchange will receive that day's price.
Steps to Make a Withdrawal Online
- Log in with your User Name and Password.
- Select the account from which you wish to withdraw units.
- Click on the Asset Management link in the column on the left.
- Next, select the Make a Withdrawal link in the middle of the page.
- Select the Recipient for the withdrawal (the Account Owner, beneficiary or the eligible educational institution).
- Select the Continue button and follow the remaining prompts.
If you have additional questions about how to make a withdrawal from your IDeal Account, please call 866-433-2533, Monday through Friday, 8 am - 8 pm ET.
Yes. As the participant, you choose the portfolios in which you invest, and you decide when and where the money will be used.
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 twice per calendar year.
Yes. You can transfer your account to a "member of the family" of the beneficiary without incurring federal income tax or penalties.3
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.
Ugift is an innovative online feature that allows you to invite family and friends to celebrate occasions with gift contributions to your IDeal account.
Upromise4 is a free to join rewards program that can turn every day purchases — from shopping online to dining out, from booking travel to buying groceries — into cash back for college. A percentage of your eligible spending will be deposited into your Upromise account. You can link your Upromise account to your eligible 529 account and have your college savings automatically transferred. Visit Upromise.com/idaho to learn more and enroll.
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.
Earnings grow tax deferred and are free from federal income tax when used for qualified higher education expenses.1,5 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.
Yes. If you are an Idaho taxpayer, you are eligible for a state income tax deduction of up to $6,000 ($12,000 if married, filing jointly) for your IDeal contributions for tax periods beginning January 1, 2017. For tax periods 2016 and prior the deduction was $4,000 ($8,000 married, filing jointly). (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.)
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 estate6, 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.
Using the assets in your IDeal 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, 7
Eligible expenses can include tuition, mandatory fees, books, supplies, computers 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
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.
No. Repayment of student loans is not considered a qualified higher education expense.
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.
Yes. Qualifying students who apply for federal financial aid, and pay for a portion of their College of Western Idaho tuition and fees using distributions directly from their IDeal college savings accounts will have the opportunity to receive a matching scholarship - up to $500 per semester. Certain restrictions apply, funds subject to availability. For full details, visit www.cwidaho.cc/ideal.
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.
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.