529 Gift Giver FAQs

Questions about giving a gift?

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  • There may be gift tax and Generation Skipping Transfer (GST) tax consequences if you are making gifts totaling more than $15,000 per year to any one individual. A person considering making gifts over this amount to the 529 account’s beneficiary during the course of the year should consult a tax advisor.

  • 529 savings can be used at most accredited two- and four-year colleges and universities and vocational schools, including many outside the U.S.

    In addition, up to $10,000 per year per beneficiary can be used for tuition for eligible public, private and religious primary and secondary educational institutions (K-12.) At this time, it is not clear what, if any, expenses will be regarded as “tuition” in the case of public schools.1 However, the account owner controls withdrawals from the account and may use the proceeds for other purposes. The earnings portion of any non-qualified withdrawals from the account would be subject to income taxes and, with some exceptions, an additional 10% federal penalty tax. In addition, the account owner may also change the beneficiary of the account to a different beneficiary. Please see the Investor Handbook for more information.

  • Gifts to a 529 account are considered completed gifts. Our college savings specialists will not be able to assist you with a return of a gift. To obtain a return of all or a portion of your gift, you would have to ask the account owner and it would be up to the account owner whether to make a withdrawal from the account and give the withdrawn amount to you. If the account owner chooses to make such a withdrawal from a 529 college savings plan, or any other withdrawal for purposes other than the payment of qualified education expenses, the account owner will be subject to income taxes on the earnings portion of the withdrawal and, with certain exceptions, an additional 10% federal penalty tax. Please see the Investor Handbook for more information.

  • No.

  • No, there are no fees charged to the gift giver.

  • The gifts are invested based on the account owner’s previous selection of investments when setting up their gifting profile.

  • An e-check, or electronic check, works like a paper check but in electronic form. When you give by e-check, we ask you for information found on a check (bank routing number and your account number) as well as authentication information about yourself.

  • If you make a gift via e-check, you will be shown a confirmation that the gift was submitted and you will receive an email notification. You can print that for your records. Please check your designated bank account to confirm that the gift was withdrawn from your account. If you do not see the gift amount withdrawn within 3 business days, contact the account owner shown on the gifting profile.

  • Once the gift has been invested in the 529 account, the account owner will receive an email confirmation and will be able to review who made the gift by logging into their account. The account owner will see the gift amount, your name and the date of gift.

    It may take 2-3 business days for the account owner to see this information.

  • No.

  • If for some reason you are uncertain about whether your gift has been processed, you should check with the bank used for this particular transaction. You may contact Franklin Templeton but we will not be able to help you unless you have the account owner on the phone line with you. We can only discuss account specific questions with the account owner.