Unique Triple Tax Benefits
Edvest 529’s Triple Tax Benefits
In the complex landscape of financial planning, an Edvest 529 college savings account can be a powerful tax-advantaged tool for paying higher education costs.
Edvest 529 offers triple tax benefits:
- State Income Tax Deduction for Wisconsin taxpayers. Limitations apply.
- 100% Tax-Deferred Growth.
- Tax-Free Withdrawals for Qualified Expenses and Roth IRA Rollovers. Limitations apply.1
Wisconsin State Tax Deduction
Contributions to an Edvest 529 plan made by a Wisconsin taxpayer can reduce their state-taxable income, dollar-for-dollar, up to annual limits.
- $5,000 per Beneficiary for single filers or married couples filing a joint return; or
- $2,500 per Beneficiary for married couples filing separate.
The maximum deduction on contributions made to an Edvest 529 account for the 2025 tax year is:
- $5,130 per Beneficiary for single filers or married couples filing a joint return; or
- $2,560 per Beneficiary for married couples filing separate.
Wisconsin taxpayers have until Monday, April 15, 2025, to contribute to an existing Edvest 529 account - or open and contribute to a new account - to be eligible for the 2024 state income tax deduction.
Contributions greater than the maximum deduction amount for the tax year may be carried forward as a deduction in future tax years, subject to the maximum deduction amount.
Tax Benefits in Detail
Check out our “What is the Best Option for College Savings” video in our new College Savings Connection video series for more of a breakdown of Edvest 529’s tax benefits.
The Wisconsin state income tax deduction for contributions made to an Edvest 529 plan is available to any Wisconsin taxpayer, not just the account owner, making gift contributions a benefit for family members or friends.
What is Tax-Deferred Growth?
Contributions to a 529 plan are made with after-tax dollars, but unlike a traditional savings account, this money is invested and could accumulate earnings over time.
Some investment accounts require you to pay taxes on the earnings (or the growth) of the account, even if you aren’t using the funds in the account. Unlike those investment accounts, any account earnings in your Edvest 529 account grow tax-deferred – which simply means that payment of taxes on earnings is postponed – or deferred - until a later date. That means any potential account earnings are reinvested to help your account grow.
What are Tax-Free Withdrawals?
Some investment accounts require you to pay state and/or federal taxes on account earnings when you withdraw funds (take a distribution).
However, the earnings accrued in an Edvest 529 account can be withdrawn from an account 100% tax-free at the state and federal level when paying for qualified higher education expenses.
Here’s a simple hypothetical example:
You opened an Edvest 529 account with $1,000. Over the life of your account, it grew to $1,100. While in the account, the $100 of growth was not taxed.
You withdrew that $1,100 from your 529 account to pay for a qualified expense, like college tuition, and you were not subject to federal and state taxes on the $100 growth.
Want to know what a qualified expense is? Click here for examples.
The above illustration is intended to show a hypothetical example of the principle of compounding. The example does not include the impact of any investment fees, expenses or taxes that would be associated with an actual investment. If such costs had been taken into account, the results shown would have been different. It also does not factor in market volatility.
Legacy and estate planning
Gifting larger amounts to an Edvest 529 account is an opportunity to support your child or grandchild’s college education and contribute to your personal investments.
Click here to learn more on how 529 plans work for legacy and estate planning, the federal estate and gift tax benefits, and if there are state benefits for giving to an Edvest 529 account.
See plan details for additional information
Have more questions?
No. Your Edvest 529 funds can be used at any accredited university in the country—and even some abroad. This includes public and private colleges and universities, apprenticeships, community colleges, graduate schools and professional schools. Up to $10,000 annually can be used toward K-12 tuition (per student). In addition, your 529 can be used for student loan repayment up a $10,000 lifetime limit per individual.1 Review a list of qualifying expenses and the state tax treatment of withdrawals for these expenses in the Plan Description.
Footnotes
- 1Withdrawals for tuition expenses at a public, private or religious elementary, middle, or high school, registered apprenticeship programs, and student loans can be withdrawn free from federal and Wisconsin income tax. If you are not a Wisconsin taxpayer, these withdrawals may include recapture of tax deduction, state income tax as well as penalties. You should talk to a qualified professional about how tax provisions affect your circumstances. Apprenticeship programs must be registered and certified with the Secretary of Labor under the National Apprenticeship Act.↩
With your Edvest 529 account, you’re never locked in. You’ll always have access to several options for this money:
- Your funds can be used to pay for a variety of eligible education expenses, including at any accredited college, university, apprenticeships, community college or postgraduate plan in the United States—and even some schools abroad.1
- Your 529 can be used for student loan repayment up a $10,000 lifetime limit per individual.1
- Up to $10,000 annually can be used toward K-12 tuition (per student).1
- You can transfer the funds to another eligible beneficiary, such as another child, a grandchild or yourself.
- If you just want the money back, you can withdraw the funds at any time. If funds are withdrawn for a purpose other than qualified higher education expenses, the earnings portion of the withdrawal is subject to federal and state taxes plus a 10% additional federal tax on earnings (known as the “Additional Tax”). See the Plan Description for more information and exceptions.
- Or you can always wait because the funds never expire, and often the choice to go to school is a delayed decision. So, if your child changes their mind down the road, your account will still be available.
Footnotes
- 1Withdrawals for tuition expenses at a public, private or religious elementary, middle, or high school, registered apprenticeship programs, and student loans can be withdrawn free from federal and Wisconsin income tax. If you are not a Wisconsin taxpayer, these withdrawals may include recapture of tax deduction, state income tax as well as penalties. You should talk to a qualified professional about how tax provisions affect your circumstances. Apprenticeship programs must be registered and certified with the Secretary of Labor under the National Apprenticeship Act.↩
Your Edvest 529 account can be used at eligible colleges, universities, vocational schools, community colleges, graduate or postgraduate plans, apprenticeships and more.1 Contact your school to determine whether it qualifies as an eligible educational institution or use the Federal School Code Search tool on the Free Application for Federal Student Aid (FAFSA) website.
Footnotes
- 1Withdrawals for tuition expenses at a public, private or religious elementary, middle, or high school, registered apprenticeship programs, and student loans can be withdrawn free from federal and Wisconsin income tax. If you are not a Wisconsin taxpayer, these withdrawals may include recapture of tax deduction, state income tax as well as penalties. You should talk to a qualified professional about how tax provisions affect your circumstances. Apprenticeship programs must be registered and certified with the Secretary of Labor under the National Apprenticeship Act.↩
There are no sales charges, startup fees or maintenance fees associated with Edvest 529 accounts. For details on total annual asset-based fees, comprised of the underlying investment expenses for each investment portfolio and the plan manager fee, review the Investment Portfolio Fee Table in the Plan Description.
