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How it works

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
 

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Withdrawing options

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.

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Send directly to a participating school

Get your money there fastest in as little as 2-3 business days.

Electronic transfers to a bank account

Transfer funds directly to yourself or to the beneficiary.

Send a check

We’ll mail your money the old-fashioned way to you or the beneficiary.

Approved expenses

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 $10,000 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 $10,000 from all 529 accounts.

FAQs

Learn more about withdrawals

No. You can use the assets in your account at any eligible school in the country and abroad. That includes 2- and 4-year colleges, graduate schools, eligible apprenticeships, and vocational/technical schools.

You or the student will receive IRS Form 1099-Q in the first quarter, if you made a withdrawal the previous year. Note: If you received the money, then you get the form. If the child or school received the money, the child will get the form.

This form will show gross distributions, earnings, and principal. If any of the earnings are considered taxable (not used for qualified expenses), they should be reported on Form 1040 as part of a federal income tax return. Be sure to keep records of all qualified expenses.

You should keep records of all qualified expenses, such as receipts, bills, and canceled checks. While you don't need to submit these to the 529 plan provider, you may need them for your own tax records or in case of an audit.

Yes, non-qualified withdrawals are subject to federal income tax and a 10% penalty on the earnings portion of the withdrawal. However, there are some exceptions, such as if the beneficiary receives a scholarship or attends a U.S. military academy.

  1. 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.
  2. 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.

  3. 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 $10,000 (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.

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