College bills on the horizon?

Will you need to withdraw funds from your 529 account to pay upcoming college bills? Your 529 plan makes it easy.

You can request a withdrawal online and have the funds sent to the account owner, the student beneficiary of the account, or an eligible college or university. Please allow 10 business days for the funds to arrive. To make your withdrawal request, log on to your account and select the account number you wish to act on. Select Asset Management, then choose Make a Withdrawal and tell us how much to withdraw and who should receive the funds.

Requesting your withdrawal online is the fastest and easiest method, but you may also download a Withdrawal Request Form and send it in, or make a withdrawal by calling us.

Include the student ID

It's important to remember that some colleges and universities require a student identification number (ID) on withdrawal checks. If you request a withdrawal online, include the student ID on the memo line. If you mail your request, include the student ID in the appropriate section of the form. If this information isn't included, it could delay the crediting of your tuition payment to the student's account.

Withdrawals can be sent by check or electronically

All qualified withdrawals requested online or by phone may be sent by check to the school, the account owner, or the beneficiary or electronically to the account owner (if bank instructions are established on your account). If you're intending to add or change bank information, please factor in a 15-calendar-day verification period, during which assets can't be sent to the bank.

Qualified withdrawals are tax-free

Remember that you don't have to pay federal income taxes on distributions from your account if the funds are used for qualified higher-education expenses.* These include tuition, fees, books, supplies, required equipment, and certain room and board costs. For more information on what qualifies as an expense, consult the IRS website at http://www.irs.gov/pub/irs-pdf/p970.pdf.

If the account owner requests funds sent to themselves or a beneficiary, they should maintain proper records indicating the money was used for qualified purposes. Please consult a tax advisor regarding your state and local income tax obligations on distributions.

By following these helpful tips, paying college bills with money from your 529 plan should be hassle-free.

Note:

*Earnings on nonqualified withdrawals may be subject to federal income tax and a 10% federal penalty tax, as well as state and local income taxes. The availability of tax or other benefits may be contingent on meeting other requirements.