FAQs

A 529 College Savings Plan is an investment plan, often sponsored by a state, that comes with special tax benefits and is designed to help people save for a beneficiary’s (like a child’s or grandchild’s) education expenses. The money saved in a 529 account grows tax free and can be used to pay for eligible expenses like tuition, books, and more. Withdrawals used for these types of qualified expenses are also tax free. 

Yes, a 529 College Savings Plan account can affect a beneficiary’s financial aid, but it all depends on who the account holder is. If the parent or dependent student is the account owner, the assets in the account are considered parental assets, and are treated more favorably than assets of a non-dependent student when determining financial aid eligibility. A UGMA/UTMA custodial account is considered a student-owned asset and may reduce financial aid eligibility more significantly. Accounts owned by other parties can affect eligibility differently. To fully understand the potential impact on your beneficiary, it’s best to consult your financial advisor or the financial aid office at your school. 

 A “member of the family” of a beneficiary is considered any of the following:

• a son or daughter or a descendant of either

• a stepson or stepdaughter or a descendant of either

• 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 of any of the other foregoing individuals

• a first cousin of the beneficiary

• For this purpose, a child includes a legally adopted child or a foster child and a brother or sister includes a half-brother or half-sister.

Any U.S. citizen or resident with a valid Social Security number or tax ID can be a beneficiary.

No. The beneficiary of your account must have a valid Social Security number. But, you could always open a VT529 account for yourself, and then switch the beneficiary to the child once he or she is born, provided they have a valid Social Security number.

Not necessarily. But there are some things to consider. When you have a VT529 account, you can change the beneficiary twice every calendar year. So, assuming none of your children will be attending college or any other eligible school at the same time, it’s possible to use the same account. However, to be on the safe side, you might want to open an account for each child, so they have access to their funds when needed. 

Yes. You may decide to open separate accounts for different beneficiaries, for example, one for each child or grandchild. Note, you can only have one account per beneficiary. You, personally, cannot have two accounts for the same person. That said, an individual may be the beneficiary on multiple accounts, for example, a parent may set up an account for their daughter, and an aunt may set up a separate account for that same child.

Yes. You can still keep your money invested in your account and you can keep contributing to it, too. But, since you will no longer be a state resident, you will not be able to benefit from the Vermont state income tax credit unless you continue to pay Vermont state income taxes.

No. You can live anywhere in the U.S. and have a VT529 account, as long as you’re a U.S. citizen or resident with a valid Social Security number or tax ID.

No. There can be only one account owner for each VT529 account. It is possible, though, for each of you to have your own separate VT529 account for the same beneficiary. You can also identify someone as the Successor Owner, or in other words, an alternative account owner should you pass away or become incapacitated. If you ever need to change the account owner, you can always do so by downloading and submitting our Change Account Owner Form.