Once a gift is received, it is part of other contributions made to the account. A gift returned would be considered a non-qualified distribution and may incur a tax penalty on any earnings in addition to the 10% federal tax penalty.

There are many ways to contribute to a 529 account including these programs; Gift of College gift cards, Upromise, Ugift, and payroll direct deposit. To learn more visit our College Gifting Overview.

There may be taxes on gifts if the amount gifted exceeds the current federal annual gift tax and lifetime limits. As of January 1, 2025, the annual gift tax exclusion is $19,000 ($38,000 for married contributors electing to split gifts). In addition, as of January 1, 2025, the amount that may be gifted in a single year and applied against the annual exclusion equally over a five-year period is $95,000 (or $190,000 for married couples). For more information, including information on whether your gift would be impacted by the federal generation-skipping transfer tax, please consult with a tax professional.

Gifts count toward a 529 account's maximum account contribution limit which is currently $550,000 for SMART529. For further details visit our Features and Benefits page.

The Account Owner has two options: (1) Change the Designated Beneficiary on the account to another eligible family member1 of the current beneficiary, or (2) Withdraw the account value. In that event, account earnings will be subject to federal and possibly state and/or local income tax as well as additional federal taxes.

The funds could be held for future use for other eligible expenses or be transferred to another beneficiary.

Yes. Uniform Gifts to Minors Act/Uniform Transfers to Minors Act – Legislation that permits a gift of money or securities to be given to a minor and held in a custodial account that is managed by an adult for the minor’s benefit. By transferring income and capital gains to a minor’s name, they may be taxed at a lower rate. Transfers from UGMA/UTMA accounts to a 529 account may be a taxable event for the minor or the minor's parents. Please see the Offering Statement for more details.

You may be able to roll over the value of other education savings accounts, including Coverdell Education Savings Accounts (ESA), Qualified Tuition Programs (529 Plans), and certain US Savings Bonds. See the Offering Statement for more details.