When it’s time to use your savings
Whether your child has chosen to attend a university or a trade school, locally or out of state, we have the information you need to help you to take a distribution quickly and securely from your Franklin Templeton 529 account.
Request a withdrawal whenever you are ready.
Complete the process in five easy steps:
1. Log in to your account
2. Select a beneficiary’s account
3. Select “Make a Distribution”
4. Enter amount and payment method
5. Submit the request
Your money, your way.
Every family's situation is unique, and you have options to withdraw your money in the way that works best for you.
What’s covered when it’s time to withdrawal?
Earnings on your 529 investments are free from tax when used for qualified education expenses.
- Tuition and fees
- Books, supplies and equipment
- Room and board1
- Computers, equipment, software and internet access
- Registered apprenticeship costs2
Additional qualified expenses include:
K-12: You can use up to $20,000 per year for tuition at elementary and secondary schools. The state tax treatment of such distributions depends on the tax law of the applicable state. Contact a tax professional to understand the tax impact of distributions for K-12 expenses in your state.3
Qualified Student Loan Payments: for the beneficiary or their sibling. Limited to a total of $20,000 from all 529 accounts.
Learn more about withdrawals
Does my child have to attend college in New Jersey?
How are withdrawals reported to the IRS?
How do I prove that my withdrawal is for qualified expenses?
Are there any penalties for non-qualified withdrawals?
Footnotes:
- The beneficiary must be enrolled at least half-time. The amount you can withdraw for room and board is limited to the cost of attendance as determined by the school or the actual amount charged if the student is living in school-owned housing.
- The SECURE Act, passed in 2019, expanded the definition of qualified education expenses to include costs associated with registered apprenticeship programs. This means you can use your 529 savings to pay for fees, books, supplies, and equipment required for participation in an apprenticeship program registered and certified with the Secretary of Labor under the National Apprenticeship Act.
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The Federal Tax Cuts and Jobs Act (TCJA), which was signed into law in December 2017 and became effective January 1, 2018, expanded the definition of a qualified higher education expense to include up to $20,000 (federal tax-free withdrawals) per year in tuition expenses at private, public and religious elementary and secondary schools (K -12). The state tax consequences of using 529 plans for elementary or secondary education tuition expenses will vary depending on state law and may include recapture of tax deductions received from the original state and may also include taxes and penalties. Some states do not offer state tax deductions or tax credits for K -12 tuition, and other restrictions may apply.
All investments involve risk including possible loss of principal.
Investors should carefully consider the 529 plan’s investment goals, risks, charges and expenses before investing. To obtain the Program Description, which contains this and other information, talk to your financial professional or call Franklin Distributors, LLC, the manager and underwriter for the 529 plan at (800) DIAL BEN/342-5236 or visit franklintempleton.com. You should read the Program Description carefully before investing and 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 its qualified tuition program.
Franklin Templeton’s 529 College Savings Plan is offered and administered by the New Jersey Higher Education Student Assistance Authority (HESAA); managed and distributed by Franklin Distributors, LLC, an affiliate of Franklin Resources, Inc.,
which operates as Franklin Templeton.
Investments in Franklin Templeton’s 529 College Savings Plan are not insured by the FDIC or any other government agency and are not deposits or other obligations of any depository institution. Investments are not guaranteed by the State of New Jersey, Franklin Templeton, or its affiliates and are subject to risks, including loss of principal amount invested. Investing in the plan does not guarantee admission to any particular primary, secondary school or college, or sufficient funds for primary, secondary school or college.
This material is being provided for general informational and educational purposes and should not be considered or relied upon as legal, tax or investment advice or an investment recommendation, or as a substitute for legal or tax counsel and provided for educational and informational purposes only. Franklin Templeton does not provide legal or tax advice. Federal and state laws and regulations are complex and subject to change, which can materially impact your results. Franklin Templeton cannot guarantee that such information is accurate, complete or timely; and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information.