FAQs: Managing your account

Using your 529 money
How can I use the money in my account?
Do I have to use my savings at a Missouri college or university?
How do I know which educational institutions are eligible?
Is paying off a student loan a qualified expense?
Contributing
Who can contribute to an account?
How can I contribute to my account?
If I choose to mail a check, when will my contribution be invested in the plan?
If I make a contribution via bank transfer, when will it be invested?
If I set up recurring contributions (also known as automatic investment plan or AIP), when will my contributions be invested?
If I want to set up recurring contributions (also known as automatic investment plan or AIP) or a bank transfer, what kind of bank account can I use?
Can I set up recurring contributions (also known as automatic investment plan or AIP) or a bank transfer using assets from a mutual fund?
Who is Ascensus Broker Dealer Services, Inc.?
How does the Upromise service work?
Making withdrawals
How soon can I begin making withdrawals?
How do I make withdrawals from the plan?
How long do withdrawals take?
What tax forms will I receive when I make a withdrawal?
Changing beneficiaries
Can I change the beneficiary?
What happens if the beneficiary doesn't want to continue his or her education?

Using your 529 money

How can I use the money in my account?

Your account can be used for any purpose. However, to qualify for federal tax-free withdrawals on earnings, the money must be used for qualified higher-education expenses for the beneficiary at an eligible educational institution.*

Qualified expenses include tuition, fees, books, supplies, and equipment (including computers) required for enrollment or attendance; certain room and board expenses during academic periods in which the beneficiary is enrolled at least half-time; and certain expenses for students with special needs.

*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.

Do I have to use my savings at a Missouri college or university?

No. The money in your account may be used at any eligible higher-education institution in the United States and abroad that qualifies under federal guidelines.

This includes most public and private colleges and universities, graduate and postgraduate schools, community colleges, and certain trade and vocational schools.

How do I know which educational institutions are eligible?

If a school's been assigned a federal school code by the Department of Education, then it's an eligible institution under Section 529.

Is paying off a student loan a qualified expense?

No. Repayment of student loans isn't considered a qualified higher-education expense. (See "How can I use the money in my account?" above for examples of qualified higher-education expenses.)

Contributing

Who can contribute to an account?

Anyone can contribute, not just the account owner. Contributions by check must be made payable to "MOST—Missouri's 529 College Savings Plan," include your account number, and be accompanied by an Additional Purchase Form.

Note: Only account owners are eligible for the Missouri state income tax deduction, if applicable, on contributions they make to their accounts.

How can I contribute to my account?

You can contribute by:

  • Electronic bank transfer (onetime contributions in varying amounts from your checking or savings account).
  • Recurring contributions (also known as automatic investment plan or AIP), which are set amounts moved from your checking or savings account on a regular basis.
  • Payroll direct deposit (through participating employers only).
  • Check (made payable to "MOST—Missouri's 529 College Savings Plan").
  • Rollover from another 529 plan (not eligible for state tax deduction).
  • Transfer from an education savings account or a Series EE or I U.S. savings bond.
  • Transfer from a Uniform Gifts/Transfers to Minors Act (UGMA/UTMA) account.

We don't accept contributions made in cash or by credit card, third-party personal checks over $10,000, foreign checks not in U.S. dollars, checks dated more than 180 days prior to receipt, or postdated checks.

We also don't accept non-cash assets, such as mutual fund shares or other securities.

Note: Contact your tax advisor to find out the tax implications related to various contribution methods.

If I choose to mail a check, when will my contribution be invested in the plan?

If your check and instructions are received in good order before the close of the New York Stock Exchange (NYSE), generally 4 p.m., Eastern time, on a day that the NYSE is open, your contribution will generally be processed that same day. Contributions received by check after the close of the NYSE will receive the next business day's trade date.

Note: All checks should be made payable to "MOST—Missouri's 529 College Savings Plan."

If I make a contribution via bank transfer, when will it be invested?

If your bank transfer is received in good order before the close of the New York Stock Exchange (NYSE), generally 4 p.m., Eastern time, on a day that the NYSE is open, you'll receive that day's trade date. Your purchase will be made at that day's closing price for units of the applicable portfolio.

If your electronic transfer is received in good order after the close of the NYSE, you'll receive a trade date of the next business day. Your bank account will be debited on the business day following the trade date (i.e., the second business day after your request date).

If I set up recurring contributions (also known as automatic investment plan or AIP), when will my contributions be invested?

Your bank account will be debited on the day you designate, provided that day is a regular business day. If the day falls on a weekend or a holiday, the debit will occur on the next business day. Your MOST 529 account will be credited on the business day preceding the day the bank debit occurs.

The first recurring contribution debit must be at least three days from the date your request is received. Quarterly recurring contributions will be made every three months on the date you indicate, not by calendar quarter.

If you don't indicate a date, the recurring contributions will be made on the 20th of the month.

If I want to set up recurring contributions (also known as automatic investment plan or AIP) or a bank transfer, what kind of bank account can I use?

You must have a personal checking or savings account held with a U.S. financial institution that is a member of the Automated Clearing House (ACH) network.

You can't use a passbook savings account for recurring contributions or electronic transfer option. Generally, money market accounts aren't eligible.

Can I set up recurring contributions (also known as automatic investment plan or AIP) or a bank transfer using assets from a mutual fund?

No. Most mutual fund companies aren't members of the ACH network.

Who is Ascensus Broker Dealer Services, Inc.?

Ascensus Broker Dealer Services, Inc., is the program manager for MOST 529 and is a leading provider of administrative services for 529 plans.

How does the Upromise service work?

Upromise, Inc., offers a service that helps you save for higher education by giving back a percentage of your qualified spending at hundreds of America's leading companies.

If you become a member of the Upromise® service (at no charge) and link your Upromise service account to your MOST 529 account, this money can be automatically transferred to your MOST 529 account periodically.

*Upromise is an optional service separate from MOST 529 and is not affiliated with the State of Missouri. Terms and conditions apply to the Upromise service. Participating companies, contribution levels, and terms and conditions are subject to change at any time without notice.

Making withdrawals

How soon can I begin making withdrawals?

You may make withdrawals at any time, taking into consideration the following guidelines:

  • The money that you contribute to the plan has to be collected by the plan before you can withdraw it. For example, if you contribute to an account by check, you may not withdraw that money until the check has cleared and the money is in your account.
  • Contributions you make by check, recurring contributions (also known as automatic investment plan or AIP), or electronic bank transfer will be available for withdrawal after seven business days.
  • If you request a withdrawal by check at the same time you change your mailing address, the withdrawal will be held for nine business days.
  • If you add or change bank information, you need to allow 15 days for withdrawals by electronic transfer.

How do I make withdrawals from the plan?

Withdrawals can be requested online, by phone, or by submitting a Withdrawal Request Form. Qualified withdrawals can be sent to the account owner, the beneficiary, or the higher-education institution.

Nonqualified withdrawals can be sent to the account owner or the beneficiary.

How long do withdrawals take?

If your withdrawal request is received in good order prior to 4 p.m., Eastern time, on a day the New York Stock Exchange is open, it will be processed with that day's trade date. Withdrawals received in good order after the 4 p.m. cut-off time will receive the next business day's trade date.

For requests made online or by phone: If you request the proceeds by check, they will typically be mailed to the recipient within three business days after the trade date. Allow ten business days for the check to be received.

If you request that the proceeds be sent to you electronically, you'll need to have banking information set up 15 days prior to making the request.

For requests made by using the Withdrawal Request Form: A check will typically be mailed to the appropriate recipient within three business days after the trade date. Allow ten business days for the check to be received.

Note: No matter how you're receiving the proceeds, allow extra time if the money is being sent directly to the education institution, as crediting the student's account may be delayed in periods of heavy volume.

Also keep in mind that during periods of market volatility and at year-end, withdrawal requests may take up to five business days to process.

What tax forms will I receive when I make a withdrawal?

The plan will generate a Form 1099-Q in January of the calendar year following a year in which there was a withdrawal from the account. The recipient of the 1099-Q will be either the account owner or the beneficiary, depending on who received the proceeds of the withdrawal.

Withdrawals sent to the account owner will be reported under the account owner's Social Security number. Withdrawals sent to the beneficiary or to an education institution will be reported under the beneficiary's Social Security number, per IRS guidelines.

Changing beneficiaries

Can I change the beneficiary?

You can change the beneficiary on your account at any time, provided that the new beneficiary is an eligible family member of the original beneficiary. The following is a partial list of beneficiary relatives who, by law, are considered to be suitable substitutes:

  • Brother, sister, stepbrother, stepsister, half-brother, or half-sister.
  • Son or daughter (or descendant of either).
  • Son-in-law, daughter-in-law, brother-in-law, or sister-in-law.
  • Spouse, or the spouse of any individual previously listed.
  • First cousin.

You can find a complete list of eligible beneficiaries in the Program Description, Privacy Policy, and Participation Agreement.

What happens if the beneficiary doesn't want to continue his or her education?

If that's the case, you have three options:

Stay invested. You can leave the money in the account in case the beneficiary decides to attend school later. There's no age limit for using the money.

Change the beneficiary. You can change the beneficiary on your account at any time, provided that the new beneficiary is an eligible family member of the original beneficiary

To see a complete list of eligible family members, refer to the Program Description, Privacy Policy, and Participation Agreement.

Withdraw the money for other uses. A 10% federal penalty tax on earnings will apply if you withdraw money for any reason other than to pay qualified higher-education expenses. Exceptions to this penalty include a withdrawal made because the beneficiary:

  • Has died or become disabled.
  • Received a scholarship, to the extent the withdrawal amount doesn't exceed the scholarship amount.
  • Has enrolled in an eligible U.S. military academy, to the extent that the amount of the withdrawal doesn't exceed the value of the education. Eligible academies include the U.S. Military Academy, Naval Academy, Air Force Academy, Coast Guard Academy, and Merchant Marine Academy.

Additionally, any accumulated earnings that are withdrawn from your account must also be reported on the recipient's income tax return for the year in which they're distributed, and you may owe federal, state, and local income taxes.

Contact your tax advisor to determine how to report a nonqualified withdrawal.