CollegeBound Saver (529 Plan)

CollegeBound Saver is a tax-advantaged 529 savings plan that allows Rhode Islanders to save for education expenses affordably and conveniently. Savings can be used at schools, for apprenticeship expenses, and credentialing program expenses.  You can even use the savings to pay K-12 tuition and expenses. There are also many options for using any funds in your account remaining after you’ve paid for the education of your beneficiary, including rolling over funds to your beneficiary’s Roth IRA account.¹ 

Benefits of opening a CollegeBound Saver account include:

• Assets grow tax-deferred and withdrawals for qualified higher education expenses stay tax-free.²
• Savings can be used to pay for qualified expenses at any accredited higher education institution in the U.S. or abroad, for trade and vocational schools, registered apprenticeships, credentialing expenses and K-12 tuition and expenses.
• There is no minimum investment required.
• Rhode Island taxpayers may receive a tax deduction of up to $1,000. (Please consult a tax advisor for information on your specific situation.)³
• You can change the beneficiary of your account at any time to a member of the former beneficiary’s family.

To learn more about CollegeBound Saver please visit www.collegeboundsaver.com [collegeboundsaver.com] or call 877-517-4829.

¹ Certain restrictions apply.  Rollover must be to a Roth IRA maintained for the benefit of the Beneficiary.  Rollovers can only be made from accounts open for at least 15 years and cannot include contributions or earnings on those contributions made within the last 5 years. The annual rollover limit is subject to Roth IRA annual contribution limits with a lifetime limit of $35,000. Consult your tax advisor prior to initiating a rollover.

²Earnings on non-qualified distributions may be subject to federal income tax and a 10% federal penalty tax, as well as state and local income taxes. Tax and other benefits are contingent on meeting other requirements and certain distributions are subject to federal, state, and local taxes. Rhode Island taxpayers who are account owners and contribute to CollegeBound Saver account are eligible for a deduction in computing state income tax for contributions made to CollegeBound Saver of up to $1,000 for married couples filing jointly and $500 for individual filers.

³Subject to certain conditions and requirements, contributions in excess of the annual limit can be carried forward and deducted in future years. If an account owner makes a non-qualified withdrawal or certain transfers or rollovers to another state's program, the amount of the deduction may be "recaptured" and included in the account owner’s Rhode Island income. Check with your tax advisor to see how 529 plans are treated for income tax purposes.