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Give Your Clients One More Reason to Rely on Your Financial Guidance

After saving for retirement, planning for a child's college education is the next big financial challenge for many of your clients. Discuss college planning with all your clients and prospects, and let them know that opening a Vermont Higher Education Investment Plan (VHEIP) account is a smart way to help prepare for a child's future higher education.

Become an expert on 529 College Savings Plans. Your clients will thank you.

Earnings Can Grow Federal and Vermont Income Tax-deferred
When your clients contribute to VHEIP, their account earnings have the opportunity to grow federal and Vermont income tax-deferred until withdrawn.

Contributions and Earnings Used to Pay for Qualified Higher Education Expenses Are Federal and Vermont Income Tax-Free
Earnings on any portion of distributions used to pay for qualified higher education expenses will be free from federal and Vermont income tax. This federal income tax-free treatment of qualified withdrawals and other federal tax benefits are now permanently in place for 529 plans through the passage of the Pension Protection Act of 2006.

Vermont Income Tax Credit
A Vermont taxpayer (or, in the case of a married couple filing jointly, each spouse) is eligible for a nonrefundable income tax credit of 10% of the first $2,500 per beneficiary contributed to VHEIP in each taxable year (i.e., a nonrefundable income tax credit of up to $250 per taxpayer per beneficiary). Rollovers from another state's qualified tuition plan into VHEIP are also eligible for this income tax credit. Pursuant to the Vermont Department of Taxes Technical Bulletin (TB-33), rollovers from another state's qualified tuition plan into VHEIP are eligible for the income tax credit to the extent the amounts were previously contributed to the other plan and provided the funds remain in VHEIP for the remainder of the taxable year in which the funds were rolled into VHEIP.

A Vermont taxpayer who previously received this tax credit must repay a portion of that tax credit, up to a maximum of the total tax credits received by the taxpayer, if the taxpayer makes a non-qualified withdrawal or withdrawal resulting from the death or disability of, scholarship award to, or attendance at one of the Military Academies by the beneficiary of a VHEIP account. A taxpayer will make such repayment to the Vermont Department of Taxes through the filing of the taxpayer's State of Vermont income tax returns.

Federal Estate and Gift Tax Benefits
Contributions to VHEIP may reduce the taxable value of your client's estate. Contributions to VHEIP, together with all other gifts from the account owner to the beneficiary, may qualify for an annual federal gift tax exclusion of $13,000 per donor per beneficiary for 2009. If an account owner's contribution to a VHEIP account for a beneficiary in a single year exceeds $13,000, the account owner may elect to treat up to $65,000 of the contributions, or $130,000 for joint filers, as having been made over a period of up to five years for federal gift tax exclusion.

WE'RE HERE TO HELP

Call us toll-free at 1-800-637-5860 to:

Meet with a VHEIP program representative
Arrange VHEIP seminars or webinars at your location
Order VHEIP Program Brochures (PDF, 277KB), table top signs and other promotional materials

Remind your clients to set up the Automatic Contribution Plan (PDF, 157KB) or use Payroll Deduction (PDF, 45KB) for their contributions.

Authorization to access VHEIP Accounts. Get form here.

PDF files require the free Adobe Acrobat Reader. Get it here.

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The tax information contained on the Vermont Higher Education Investment Plan (the Plan) Web site is not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding tax penalties that may be imposed on the taxpayer. It was written to support the promotion of the products and services addressed in the Web site. Taxpayers should seek advice based on their own particular circumstances from an independent tax advisor.

The Plan is administered by the Vermont Student Assistance Corp. (VSAC). TIAA-CREF Tuition Financing, Inc. (TFI) serves as Plan Manager.

The investment approaches described are not recommendations and do not take into consideration personal goals or preferences. After evaluating information you consider important in making an investment choice, the ultimate decision is up to you. It is a good idea to revisit your investment strategy periodically as your goals, personal financial situation, and market conditions change.

Consider the investment objectives, risks, charges and expenses before investing in the Plan. Please call toll-free 1-800-637-5860 for a Disclosure Booklet containing this information. Read it carefully.

Before investing in a 529 plan, you should consider whether the state you or your designated beneficiary reside in or have taxable income in has a 529 plan that offers favorable state income tax or other benefits that are only available if you invest in that state's 529 plan.

The State of Vermont, its agencies, VSAC, TIAA-CREF Tuition Financing, Inc., Teachers Insurance and Annuity Association of America and its affiliates do not insure any Account or guarantee its principal or investment return. Account value will fluctuate based upon a number of factors, including general market conditions.

The Plan Web site is for informational purposes only, and does not constitute an offer to sell or solicitation of an offer to buy any security that may be referenced on the site. Such offer or solicitation can be made only through the Disclosure Booklet.

The Plan Web site contains links to other Web sites. Neither the Plan nor TFI and its affiliates are responsible for the content of those other Web sites. The accuracy of information on those sites cannot be confirmed.