FAQs

There is no fee to open an account. However, you’ll need to make an initial deposit of at least $25 to get started and a $1 minimum for any contribution after that. Additionally, there are some minimal fees that apply to all accounts.

There is a low program management fee of 0.13% per year and low underlying investment fees between 0.00%-0.03% per year on the investments in your VT529 account.

Some fees are added based on how you use the account:

• $20 per year for paper statements when you choose to opt out of electronic statements

• $25 if a transfer fails or check bounces

The complete fee structure is found in the VT529 Plan Disclosure Booklet (PDF).

No. There are no fees for making gift contributions.

Yes. If you make a withdrawal from your account for a non-qualified expense, the earnings tied to that distribution will be considered taxable income. There is a 10% federal tax penalty made on any earnings used to pay for non-qualified expenses. You will also have to pay back the state for any state income tax credits you have taken for contributions made to your account in relation to the amount withdrawn. Remember, your account grows and earns interest, tax-free, and when you withdraw those savings to use for qualified educational expenses, you can spend it tax-free too. These accounts are designed to be flexible, with most expenses related to higher education qualifying as eligible. You will only pay taxes if you use your account funds to pay for non-qualified expenses.

There are a few exceptions. You will not need to pay this additional 10% federal tax penalty if a withdrawal is made because the beneficiary has died or become disabled; has received a scholarship (the withdrawal amount cannot exceed the scholarship amount); or if the beneficiary has enrolled in an eligible military academy (the withdrawal amount cannot exceed the value of the education). If you’re still unsure about how things may affect your taxes, you may want to speak to a tax advisor for more information.

Yes. The earnings portion of funds withdrawn for non-qualified purposes are typically subject to federal income tax, as well as an additional 10% federal penalty tax. Taxable withdrawals, on the other hand, are subject to applicable federal income tax on earnings, if any, but are not subject to the 10% additional federal penalty tax on earnings.

No, there are no fees for any rollovers out of the plan.