Alameda County 529 Plan

A 529 plan is a tax-advantaged savings plan designed to encourage saving for future college costs. 529 plans, legally known as “qualified tuition plans,” are sponsored by states, state agencies, or educational institutions and are authorized by Section 529 of the Internal Revenue Code.

You can use the assets in your account to pay for the beneficiary’s qualified higher education expenses. Earnings withdrawn for any use other than qualified higher education expenses are subject to a 10% federal tax penalty in addition to federal and, if applicable, state income tax.

CollegeAmerica accounts can affect a beneficiary’s ability to qualify for federal need-based financial aid.

A 529 account, such as a CollegeAmerica account, is regarded as an asset of the student if the student is an independent student, and an asset of the parent if the student is a dependent student.

With a 529 savings plan, you can leave the money in the account if the beneficiary decides to attend college at a later time. Or you can select a new beneficiary, including yourself or anyone who is a member of the current beneficiary’s family.

If you withdraw money from the account for anything other than educational expenses, the withdrawal will be subject to ordinary federal income tax plus a 10% penalty on the earnings.

You can withdraw the assets if the beneficiary receives a scholarship, becomes disabled or dies. A withdrawal on account of the beneficiary’s death, disability or receipt of a scholarship (to the extent of the scholarship award) is subject to federal income tax but no federal tax penalty.

Yes. You need to use the assets in the account or designate a new beneficiary within 30 years after the beneficiary graduates from high school or within 30 years after opening the account, whichever comes later. (Requests for an extension of this time limit will be considered on a case-by-case basis.)

For your Alameda County employer-sponsored 529 plan, you may invest as little as $25 per fund.

Investments in the plan are not guaranteed, and are not covered by FDIC or NCUA insurance. As an investor in the plan, you will have the ability to determine what type of mutual fund to invest in, and you may change investments as stated in the fund prospectus. Depending on the mutual fund or funds you select, your investments may be subject to stock or bond market risks as stated in the fund’s prospectus. Always review the prospectus prior to investing.

To get started with your Alameda County Employer-Sponsored 529 plan or for more information, please contact the Osaic Institutions, Inc. financial advisor located at 1st United Credit Union: