Plan ahead for your child’s education with the my529 savings program

Most parents aren’t thinking about college when they welcome their newborn but it’s never too early to start saving for the future. There’s a way to do that through the my529 program, Utah’s official nonprofit 529 educational savings plan, a tax advantaged way to save for the cost of higher education. 

“my529 has been around for 30 years,” said my529 Marketing Specialist Jenny Sass. “We’re celebrating our 30th anniversary this year. We’re quasi-governmental, so we actually reside under the Utah System of Higher Education.”

Money goes in post-tax and earnings on that investment are tax free both federal and state if it’s used for what is termed qualified educational expenses, she said. “That could be anything like tuition, fees, books, room and board, supplies, equipment, computers, etc. In recent years there’s been additional things added such as registered apprenticeships and student loan repayment up to $10,000.”

Most recently, there’s been some addition of different credentialing and certificate courses, Sass said. “For Utah residents there is also the opportunity to take advantage of a state tax credit. So for owners that open accounts for beneficiaries who are under 18 years of age they have the ability to receive a tax credit which makes it a little more appealing for our Utah residents to get involved with the program.”

“The funds can be used in state,” she said. “They can also be used out of state. They can be used for community college, for a traditional four-year school and they could also be used for a tech college.”

“There’s really a lot of flexibility,” Sass said. “With the passing of SECURE 2.0 there’s also now the ability to roll over up to $35,000 of leftover funds into the beneficiary’s Roth IRA. The guidance on that has been if the account is open for at least 15 years, you have the ability to do that because one of the questions we’ll often get is, ‘what if my child doesn’t go to school?’ So this is just providing more flexibility that way.”

The advantage of it being post-tax is when someone takes the money out there is no tax on the earnings portion, she said. “Probably by far the biggest selling point of a my529 plan is that tax- free growth.”

Utah has been fortunate to have a great plan, Sass said. “We’re the third largest direct sold in the country and we have consecutively received the Morning Star gold rating. They’re an independent financial company that rates all of the 529 plans across the United States. We’re the only plan to have that distinction for 15 years running as the top spot (gold) in recent years here.”

my529 recently announced a new program called incentiFive. “It’s specifically for new Utah parents,” Sass said. “So it’s for newborns and it’s a five-year saving incentive program. It’s really designed to help Utah families start an education savings habit early.”

The way it works is if a family has a baby born between Sept. 1, 2025 and Aug. 31, 2026 they’re eligible to participate. “For the next five consecutive years if you put in $100 each of those years in years one through four you’re eligible for a $100 incentive contribution from my529 and in year five you would receive $529,” Sass said. “So you have the ability over the course of five years to get $929 of incentive contributions from my529. All together that’s at least $1,429 in contributions to a child’s education savings account by the time they reach kindergarten.”

It’s free to open a my529 account and there is no minimum deposit or account balance. For more information about my529 go to my529.org/. To enroll in the incentiFive program visit my529.org/incentifive/.