If your company would like to encourage a prepared workforce that will rely less on student loan debt in the future, consider offering CollegeChoice 529 as a benefit this fall.
More than 1,600 Indiana companies currently provide their employees with access to ACH payroll deduction for contributions to CollegeChoice 529 Plans, Indiana’s tax-advantaged education savings program. CollegeChoice hopes to expand this offering within the Indianapolis business community as a way to show support for families saving for higher education.
According to Marissa Rowe, executive director of the Indiana Education Savings Authority, “as of May 2020, employees who save at work have an average monthly CollegeChoice 529 contribution of $175. Those dollars go a long way to prepare for future educational opportunities such as graduate school, certificates, or 2-year or 4-year degrees at any eligible institution. Every dollar saved is one less that has to be paid back with interest, and there’s no better place to start saving than at work.” The Indiana Education Savings Authority is the state body that administers Indiana’s 529 program under the direction of Indiana’s Treasurer of State Kelly Mitchell.
Accounts are funded with after-tax dollars and can be opened online with as little as $10. Employees who save in a CollegeChoice 529 account may be eligible for a 20% state tax credit on their contributions worth up to $1,000 each year.* Employers who wish to offer payroll deduction can generally use their current ACH direct deposit system, so there is no cost to employers and no added administrative burden.
For more information about the CollegeChoice 529 Direct Savings Plan (CollegeChoice 529), call 1.866.485.9415 or visit www.collegechoicedirect.com to obtain a Disclosure Booklet, which includes investment objectives, risks, charges, expenses, and other important information; read and consider it carefully before investing. Ascensus Broker Dealer Services, LLC. (ABD) is distributor of CollegeChoice 529.
Before you invest, consider whether your or the beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in that state’s qualified tuition program.
CollegeChoice 529 is administered by the Indiana Education Savings Authority (Authority). ABD, the Program Manager, and its affiliates, have overall responsibility for the day-to-day operations, including investment advisory, recordkeeping and administrative services, and marketing. CollegeChoice 529’s Portfolios invest in: (i) mutual funds; (ii) a stable value account held in trust by the Authority at Vanguard; and/or (iii) an FDIC-insured omnibus savings account held in trust by the Authority at NexBank. Except for the Savings Portfolio, investments in CollegeChoice 529 are not insured by the FDIC. Units of the Portfolios are municipal securities and the value of units will vary with market conditions.
*Earnings on non-qualified withdrawals 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 other withdrawals are subject to federal, state, and local taxes. Indiana taxpayers are eligible for a state income tax credit of 20% of contributions to a CollegeChoice 529 account, up to $1,000 credit per year ($500 for married couples filing separately). This credit may be subject to recapture from the account owner (not the contributor) in certain circumstances, such as rollovers to another state’s 529 plan, federal nonqualified withdrawals, withdrawals used to pay elementary or secondary school tuition for a school outside of Indiana, or qualified education loan repayments as described in the Disclosure Booklet.