Idaho Employer Tax Credit FAQs
 

Idaho families are dreaming big for their futures. And 75% of employees wish their employer would help them save for college. Additionally, 72% said receiving customizable benefits such as a 529 would increase their loyalty to the company that they work for.

Meaningful benefits DO make a difference in retaining your employees and contributing to your employees’ education dreams is an investment in them, their families and the future of Idaho.

For every dollar an employer contributes to an employee’s IDeal - Idaho College Savings program account, the employer receives a 20% tax credit, up to a maximum of $500 per employee per year. So, an employer could give up to $2,500 per employee and receive $500 for each person. Read the official tax law here.

 

  • The Idaho law does not exclude any type of employer.
  • The applicable tax law for each type of employer will apply regarding how the tax credit is applied.
  • The new law indicates that the contribution must be to an Idaho College Savings Program account belonging to an employee of the employer.
    • (4) As used in this section, the term "employee" means a person who, during the taxable year for which the credit is allowed, is subject to Idaho income tax withholding, whether any amounts are required to be withheld, and who is covered by the employer for unemployment insurance purposes under chapter 13, title 72, Idaho Code.

This program is not subject to the nondiscrimination rule of the Employee Retirement Income Security Act of 1974 (ERISA). Idaho Code Section 63-3029M does not stipulate participation rules. You can choose to contribute to any or all employees.

The 529 account contribution would be additional income to the employee and would be reported as income on the W2. It is subject to taxes and withholdings.

No. IRC 529 does not have any income limitations. Contributions to a 529 Plan are made with after-tax dollars and the earnings are not taxed provided the distributions are used to pay for qualified educational expenses.

There is no limit on the number of accounts an employee can have. The employer can choose how many of the employee’s accounts they would like to contribute to.

The Idaho law specifies that in order for a business to receive the tax credit, the contribution must be made to an employee’s account. If, for instance, your employee’s spouse is the account owner, this will not meet the standard of the tax law. The employee would need to open a new account in their name at www.idsaves.org.

No. The Idaho law specifies that in order for an employer to receive the tax credit, the contribution must be made to an employee’s Idaho College Savings Program account established pursuant to chapter 54, title 33, Idaho Code.

  • This new law is specifically for employer contributions to employee accounts. Employer contributions made to an employee’s account are not eligible for the individual tax deduction by the employee.
  • The employee can only deduct the contributions they made individually.
    • The employee will receive the employer funds in their account but will not be able to deduct those on their individual return.

The applicable tax law for each type of employer will determine how the tax credit is applied. We encourage employers to consult with a tax professional for advice.

Employer contributions can exceed the $2,500 that would provide the full Idaho tax credit provided the contribution does not cause the account to exceed the Program’s maximum account balance.

The Idaho employer tax credit will max out after an employer contributes $2,500 per employee, per year. ($2,500 *20% = $500 max tax credit per employee, per year). The credit will be less if the employer contribution is less than $2,500.

No, enrollment is always open. You can start contributing any time.

You can completely customize your participation. Some employers may require an employee to contribute funds to their personal accounts to be eligible for a 529 match, others may contribute when an employee has a new baby, work anniversary or as a bonus for performance. There are many creative ways to contribute. Contact us to discuss ideas and implementation.

  • Funds should not be dispersed to the employee.
  • Employers will contribute directly to the employees’ Idaho College Savings Program account(s) by sending funds to the IDeal Program via check, ACH or wire with a letter of instruction.
    • Matched funds
      • Employers who are matching funds can use the 529 Employer Boost Platform to seamlessly manage the administration and details of the transactions in one place. Learn More
    • Nonmatched funds
      • Contribute directly to your employees' Idaho College Savings Program account(s) easily by sending funds to the IDeal Program via check, ACH or wire with a letter of intent.
         
  • You may contribute as often, and whenever, you like.
  • If you are using the 529 Employer Boost platform, you can set up recurring contributions.

The method in which deposits are sent will determine the timeframe in which they will show up in an employee’s account. Deposits will show up approximately 10 days from the date we receive your funds. They are fully vested immediately.

There are many options for using Idaho College Savings Program funds including K-12 tuition, registered apprenticeships, two-and-four-year programs, graduate programs and some student loan repayment.

We are here to walk you through this process and answer all your questions. We also offer in-person presentations and webinars to help educate your staff about this great new benefit. Get started

Ascensus Broker Dealer Services is the distributor of IDeal - Idaho College Savings Program. Learn more about Ascensus Broker Dealer Services, LLC on FINRA's BrokerCheck.

Important Legal Information

By clicking on one of the social media icons, you are leaving the IDeal website, maintained by Ascensus, and are being redirected to a social media site solely maintained by the Idaho College Savings Program Board (“Board”). Ascensus Broker Dealer Services, LLC, the program manager for IDeal, does not monitor or endorse the Board's social media activities. All IDeal social media activities are the sole responsibility of the Board.

Mr. Thiros is a registered representative of Ascensus Broker Dealer Services LLC, 877-529-2980, 95 Wells Ave, Newton MA (member FINRA/SIPC) and is not employed by the State of Idaho.

For more information about IDeal - Idaho College Savings Program ("IDeal"), call 866-433-2533  click here to obtain a Disclosure Statement. The Disclosure Statement discusses investment objectives, risks, charges, expenses, and other important information. Because investing in IDeal is an important decision for you and your family, you should read and consider the Disclosure Statement carefully before investing.

Please Note: Before you invest, consider whether your or the beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in that state’s qualified tuition program. You should also consult your financial, tax, or other advisor to learn more about how state-based benefits (or any limitations) would apply to your specific circumstances. You also may wish to contact directly your home state’s 529 college savings plan(s), or any other 529 plan, to learn more about those plans’ features, benefits, and limitations. Keep in mind that state-based benefits should be one of many appropriately weighted factors to be considered when making an investment decision.

IDeal is administered by the Idaho College Savings Program Board ("Board"). ABD, the program manager, and its affiliates, have overall responsibility for the day-to-day operations, including investment advisory, recordkeeping and administrative services, and marketing. The Vanguard Group, Inc. ("Vanguard") serves as Investment Manager for IDeal. Sallie Mae Bank serves as the Savings Portfolio Manager for IDeal. IDeal's Portfolios invest in either: (i) mutual funds and a separate account offered or managed by Vanguard; or (ii) an FDIC-insured omnibus savings account held in trust by the Board at Sallie Mae Bank. Except for the Savings Portfolio, investments in IDeal are not insured by the FDIC. Units of the Portfolios are municipal securities and the value of units will vary with market conditions.

Investment returns will vary depending upon the performance of the Portfolios you choose. Except to the extent of FDIC insurance available for the Savings Portfolio, you could lose all or a portion of your money by investing in IDeal, depending on market conditions. Account Owners assume all investment risks as well as responsibility for any federal and state tax consequences.

Not FDIC-Insured (except for the Savings Portfolio). No Bank, State or Federal Guarantee. May lose value.