State Treasurer Riley Moore and his office is working to remind West Virginia families that the holiday season is a good time to open a SMART529 account or to contribute to an existing account.
“There is no better gift than the gift of contributing to a child’s college education fund,” Moore said. “Instead of buying another toy, parents and grandparents can purchase a gift card that can easily be redeemed online, or they can invest directly through the SMART529 website.”
The SMART529 WV Direct Plan is available to residents of West Virginia or to non-residents where the beneficiary is a resident of West Virginia. Contributions made to SMART529 each year may reduce the federal adjusted income dollar as a modification on the West Virginia Personal Income Tax Form. Earnings in a SMART529 grow federal and state tax free. For estate planning purposes, SMART529 offers accelerated gifting.
When money is eventually taken out of a SMART529 plan to pay for qualified educational expenses such as tuition, room and board, books, and supplies or equipment required for enrollment or attendance at an eligible institution, there are no federal or state income taxes on the withdrawal, including any earnings.
Non-qualified withdrawals are taxable as ordinary income to the extent of earnings and may also be subject to a 10 percent federal income tax penalty. Such withdrawals may have state income tax implications.
There are many ways to contribute to a SMART529 account including the following programs: Gift of College gift cards, Upromise, Ugift, and payroll direct deposit. Invest directly by clicking this https://www.smart529direct.com/wvdtpl/uii529enroll/gettingStarted.do or call 866-574-3542 to request an enrollment kit.
“Contributing to your child’s college savings plan is a practical, meaningful gift that your child will appreciate into adulthood.” Moore said. “Starting early with your SMART529 college savings plan means that your investments will have more time for potential growth.”
SMART529 is a qualified tuition program issued by the board of trustees of the West Virginia College and Jumpstart Savings Programs and administered by Hartford Funds. More information about SMART529 plans and investment options is available at www.SMART529.com.
