End-of-school celebrations? It’s a great time to give the gift of education! When you contribute to a child’s 529 college savings plan, you’re opening the door to education opportunity that lasts a lifetime. With Vermont’s state-sponsored plan, you can open an account with as little as $25 or give any amount as a gift. Grandparents, family and friends can give, too!
Get a Vermont income tax credit. The Vermont Higher Education Investment Plan is the only savings program that qualifies for a 10% Vermont income tax credit on annual contributions or rollovers for college or training. Gifts made by others into a VHEIP account may also qualify.
Choose from three ways to give (Click the tabs below for instructions):
Did you know: As the account owner, you are eligible for tax advantages for contributions to a VHEIP account. Find out more.
With our eGift option, you can invite family and friends to make a contribution through VHEIP’s secure website. There are no checks to be mailed or deposited. With just a few clicks, the gift goes right into the child’s VHEIP account. It’s safe, secure, and convenient. Log in to your account to get started.
That’s it! Here’s what happens next:
Federal tax reform info: The federal tax act of 2017 includes provisions related to 529 plan accounts, beginning with the 2018 tax year. See the October 2018 supplement of the Disclosure Booklet for details.
Questions? Find answers here or give us a call toll-free at 1-800-637-5860, Mon – Fri, 8:00 am – 7:00 pm ET.
There is no minimum amount that friends and family members may contribute (gift) to your existing account(s).
Yes! You may contribute to a VHEIP account already set up for a beneficiary (or to multiple VHEIP accounts), and not maintain your own accounts for each child or loved one for whom you wish to make a gift. You can contribute online via electronic funds or by mail with a check. Learn how.
If you are a Vermont taxpayer, you may qualify for a 10% Vermont income tax credit on your annual VHEIP gift contributions, as long as the account owner does not claim the gift contributions towards his or her own credit. Learn more about the Vermont tax credit.
Each account can have only one account owner and one beneficiary. However, each beneficiary may have more than one account, and you may open separate accounts for as many different beneficiaries as you wish. Friends and family members may open a separate account for your beneficiary. They will need to know the Social Security Number or federal Taxpayer Identification Number of your beneficiary and his or her birth date and street address (not PO Box) to complete the account enrollment process.
No. Only the account owner has access to account details. Gift givers can only contribute to the account. They cannot perform any transactions or see account details.
Contributions to a VHEIP account are invested according to the investment portfolios and allocations established by the account owner for his/her account. Friends and family members can contribute to the account, but only account owners can access the account and make changes to investment allocations.
Contributions into a VHEIP account may reduce the taxable value of your estate. Your contributions, together with all other gifts from the account owner or third-party contributors to the designated beneficiary, may qualify for an annual federal gift tax exclusion of $15,000 per donor, per designated beneficiary. If your contribution to a VHEIP account for one beneficiary exceeds that $15,000 (or $30,000 for joint filers) exclusion, you may elect to treat up to $75,000 of the contributions (or $150,000 for joint filers) as having been made over a period of up to five years for purposes of determining your annual federal gift tax exclusion. This means that an account owner or a third-party contributor may contribute up to $75,000 in a single year to an account without the contribution being considered a taxable gift, provided that the contributor makes no other gifts to the beneficiary in the same year in which the contribution is made and in any of the succeeding four calendar years. The contributor must make this election on his or her federal gift tax return by filing IRS Form 709. Consult your tax advisor for additional details.
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Contributions by check should be accompanied by a completed Additional Contribution by Mail Form or should include reference the VHEIP account number(s) to which the contribution should be applied.×
As Vermont’s official 529 college savings plan, VHEIP is the only 529 plan that qualifies for a Vermont state income tax credit.
A qualifying family member includes any siblings or step-siblings, natural or legally adopted children, stepchildren, parents or ancestors of parents, step-parents, first cousins, nieces or nephews, and aunts or uncles. In addition, the spouse of the beneficiary or the spouse of any of those listed above also qualifies as a family member of the beneficiary.×
Qualified higher education expenses include tuition, fees, and the cost of books, supplies, and equipment required for the enrollment and attendance of the beneficiary at an eligible educational institution, and certain room and board expenses. Qualified higher education expenses also include certain additional enrollment and attendant costs of a beneficiary who is a special needs beneficiary in connection with the beneficiary’s enrollment or attendance at an eligible institution. For this purpose, an eligible educational institution generally includes accredited postsecondary educational institutions offering credit toward a bachelor’s degree, an associate’s degree, a graduate-level degree or professional degree, or another recognized postsecondary credential.×
A non-qualified withdrawal is any withdrawal that does not meet the requirements of being: (1) a qualified withdrawal; (2) a taxable withdrawal; or (3) a rollover. The earnings portion of a non-qualified withdrawal may be subject to federal income taxation, and the additional tax. Recapture provisions apply. See the Disclosure Booklet for details.×
Eligible education institutions are accredited, post-secondary educational institutions offering credit towards a bachelor’s degree, an associate’s degree, a graduate level or professional degree, or another recognized post-secondary credential. Use the Federal School Code Search on the Free Application for Federal Student Aid (FAFSA) website or contact your school to determine if it qualifies as an eligible educational institution. 529 Plan assets can also be used at some accredited foreign schools. If you have a question, contact your school to determine if it qualifies.×
The federal tax act of 2017, signed into law in December 2017, includes provisions related to 529 plan accounts, beginning with the 2018 tax year:
VSAC, as administrator of the Vermont 529 plan, will provide information as details about the Vermont income tax effects are clarified. We encourage you to consult a qualified tax advisor or the Vermont Department of Taxes at tax.vermont.gov concerning federal and state tax implications for tax years 2018 and beyond, and to save documentation for how all VT 529 fund withdrawals are used.×
Simply login to your account and navigate to Upload Documents, located under the Documents tab.