FAQs

VT529 accounts have some similar features, but they are not checking or savings accounts. VT529 accounts are a special form of investment account. You will be saving or investing your money in different options provided. VT529 accounts also allow you to grow your money and to save long-term for education expenses.

Vestwell State Savings, LLC, is the plan manager for VT529 and provides the online platform. Vestwell Holdings, Inc. is backed by some of the world’s largest financial institutions, and is committed to improving lives through investing — while staying true to Vestwell’s commitment to help close the savings gap that exists today. For more information, check out the Plan Disclosure Booklet (PDF).

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. 

 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.

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 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.

Yes, you can transfer assets from a UGMA/UTMA account into your VT529 account, but only if your VT529 account is also set up as an UGMA/UTMA account. You may wish to speak with your financial or tax advisor, as there could be tax implications and other penalties.

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.