Top 529 Myths
Is it true what you've heard about 529s?
fact: You can use your IDeal account assets at any eligible higher education institution around the country and abroad — not just in Idaho. You can also use it to pay for graduate school, eligible trade and vocational schools, apprenticeship programs that are registered and certified with the U.S. Secretary of Labor, and qualified postsecondary credentialing expenses.1 For a list of eligible schools, visit the U.S. Department of Education. The IDeal plan can also be used to pay for K-12 qualified expenses up to $20,000 per year, per student at K-12 public, private and religious schools.
fact: You can use your IDeal account assets for any qualified withdrawals. Qualified withdrawals for higher education include tuition, mandatory fees, certain room and board costs, laptops and computers, and supplies.2 Other qualified withdrawals include K-12 qualified expenses up to $2-0,000 per year, per student at K-12 public, private and religious schools, expenses for registered qualified or eligible apprenticeship programs, and student loan repayments up to $10,000 lifetime, for the Beneficiary or a sibling of the Beneficiary.
fact: Most plans have low minimums. You can open an IDeal — Idaho Education Savings Program account with only $25. To help families save more, IDeal offers additional programs, like Ugift® − Give College Savings, which allows account owners to invite family and friends to make gift contributions, and Upromise®, a service that lets account owners earn college savings when they shop online, dine out, and more.3
fact: 529 plans have several investment types to meet your needs. IDeal offers three types of investments. Target Enrollment Portfolios offer adjusting portfolios in which the investments shift from a growth-oriented allocation to a more conservative mix based on the year the beneficiary is expected to enter their education program. There are also six Fixed Asset Allocation Portfolios that let you create your own investment strategy and a third option of an FDIC-insured Savings Portfolio.4
fact: It's never too late. Even if your student is in high school you can benefit from a 529 plan. IDeal earnings grow tax deferred, and when you withdraw the money for a qualified expense, it's federal tax free.5 Idaho taxpayers can deduct up to $6,000 ($12,000 if married, filing jointly) annually from their state adjusted gross income for contributions for tax periods beginning January 1, 2017.
fact: There are no income limitations for a 529 plan. In fact, as part of the tax advantages offered by a 529 plan, account owners can contribute $19,000 ($38,000 if married, filing jointly) in a single year without incurring a gift tax.
fact: Are you considering career retraining or an advanced degree? There's no maximum age for a 529 plan. As long as your school or program is eligible, you can use your 529 plan assets — even if you're not attending full-time.
fact: Unlike other college savings options, a 529 plan account owner controls the account. That means you can change your beneficiary to another eligible "Member of the Family" with no tax penalty.6
fact: Parents, grandparents, aunts, uncles, friends...almost anyone can be an account owner.7 You can also open an account for your own education.
fact: Most 529 plans let you open an account online. It doesn't take long to open an IDeal account at idsaves.org.
1 Qualified postsecondary credentialing expenses generally include tuition, fees, books, supplies, and equipment required to enroll in or attend a recognized postsecondary credential program, and fees for testing and continuing education if required to obtain or maintain a recognized postsecondary credential. For a program or credential to be considered recognized it must meet certain criteria. Please refer to the IDeal Disclosure Statement for important additional information describing the tax treatment of distributions taken for postsecondary credentialing expenses.
2 Expenses for tuition and certain other expenses in connection with enrollment or attendance at an elementary or secondary public, private or religious school as determined under applicable state law, not to exceed $20,000 (effective beginning January 1, 2026) per student per year in the aggregate across all 529 Plans for such student. See the IDeal Disclosure Statement for details. Since different states have different tax provisions, if you or your beneficiary, as applicable, are not an Idaho taxpayer, the state(s) where you pay income tax may differ in its state income tax treatment of K-12 expenses. You should consult your own state’s tax laws or your tax advisor for more information on your state’s taxation of withdrawals for K-12 expenses.
3 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 and conditions subject to change without notice. Transfers subject to a $25 minimum. Upromise, Inc. is affiliated with Upromise Investments, Inc.
4 Except for the Savings Portfolio, investments in IDeal — Idaho Education Savings Program are not insured by the FDIC.
5 Contributions to the IDeal — Idaho Education 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.
6 For beneficiary changes to occur free from federal or state income taxes, the new beneficiary must be a Member of the Family of the original beneficiary. See the Disclosure Statement for the definition of Member of the Family. You should consult with a tax advisor when considering a change of beneficiary.
7 You must be a U.S. citizen or resident alien, have a Social Security number or Tax Identification number, and have a permanent U.S. address (not a P.O. Box).