What can I do with unused or excess funds in my account?

If you end up with excess funds saved in your VT529 account, you have a few options.

You can transfer your excess funds to a different beneficiary penalty-free (as long as they are considered a “member of the family”).

You can hold on to the funds to use for a beneficiary in the future (possibly a grandchild) or even for yourself at a later time, also penalty-free.

If your beneficiary gets a scholarship, you can withdraw up to the amount of the scholarship without a penalty or additional tax, but you will have to pay income tax on the earnings.

And, you can always withdraw your remaining funds as a non-qualified withdrawal, but the earnings portion (not the amount you contributed) of a non-qualified withdrawal typically is subject to federal income tax, and an additional 10% federal penalty tax.