Does anyone here know about 529 college savings plans?
My daughter is 9 years old, and I need to open a college savings plan for her. She says she wants to go to UCSD (CA), even though we live in Nevada. What will happen if I open a 529 savings account in Nevada, then move to California when she's in high school; if that's where she still wants to go? Are there any tax repercussions? If she's really going to UCSD, I don't want to pay out of state tuition! Any advice would help, thanx.
Personal Finance - 1 Answers
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Answer 1 :
You can set up a 529 plan through any state no matter where you actually live. Some states offer state income tax deductions for investing in your home state plan but CA and NV are not one of those. If you do choose to open a plan sponsored by the state of NV you can still use those funds at any federally accredited school nationwide as well as many schools overseas. It will not matter where you live at the time your daughter goes to school. As long as the funds are used for qualified higher education expenses they will be able to be withdrawn tax free. Another thing to keep in mind is the fact that you are able to rollover your 529 plan to a different plan once every 12 months. Therefore if you open a plan and decide you want to go with a different state's plan you can do so.
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