^*Check with the state's 529 plan rules to see if they permit this option. Not all states follow the federal tax rules. You may be subject to state income tax and penalties for using 529 amounts for K-12 tuition expenses.

^**Full-time college students under the age of 24 may also be taxed at their parents' rate on unearned income in excess of $2,600 in 2024 and $2,700 in 2025, unless the students' earned income was greater than one-half of their support. Earned income from a job or self-employment is not subject to the kiddie tax.

^†For 2025, it's possible to contribute a lump sum (superfund) of up to $95,000 to one or more 529 college savings plan in a single year (or $190,000 for couples) without being subject to the potential gift tax. The IRS views the money as an annual $19,000 (or $38,000 for couples) gift over five years. However, if you contribute more money on behalf of the same child during those five years, you may trigger the gift tax.

^††Annual contributions for single filers are capped at $2,000 for MAGI up to $95,000 and are phased out for MAGI between $95,000 and $110,000.

^§Custodial accounts are subject to the so-called "kiddie tax." This tax rule applies to children who have unearned income (i.e., investment income) up to a certain threshold. Over that threshold, the child will pay taxes at the parent's tax rate. To learn more, see IRS Publication 929.

^§§Rule does not apply to special needs beneficiaries.

^‡Amounts over $19,000 per person ($38,000 for a married couple) in 2025 may be subject to the gift tax.