Struggling to find a gift idea for that hard-to-shop-for teen? Wondering what to get that toddler who has enough toys?
Invest in that child’s future by giving the gift of college savings this holiday season — and give yourself the gift of a tax break. Illinois State Treasurer Michael Frerichs says contributing to a Bright Start 529 plan is a great way to inspire students to attend a college, university, or vocational school.
A child is three times more likely to attend college if they know that they have a dedicated college savings account, according to research from the Center of Social Development at Washington University in St. Louis. Ensuring nationally recognized 529 programs is one way Frerichs’ office makes college more accessible.
“Giving the gift of a Bright Start contribution is a great way to share the importance of education, set high expectations for students, and avoid holiday crowds,” Frerichs said. “By adding to their college savings plans, grandparents, aunts and uncles, and parents can reduce the amount a family may have to borrow later.”
Nearly half – 46% – of all parents say they will ask for contributions to 529 higher education plans as gifts for their children for holidays or other major events, according to the nonprofit College Savings Foundation’s recent State of Higher Education survey of 1,000 parents across the country.
Through the Bright Start GiftED program, any individual can contribute to a friend’s or family member’s Bright Start 529 account at brightstart.com/give-a-gift/. It’s easy to do.
Friends and relatives can contribute electronically. Parents can send an invitation by logging in to their Bright Start account and clicking on the GiftED link in the upper left corner, then on the + sign.
From there, select the Bright Start account from which you want to send GiftED invites and choose the “add a new invitee” option. You’ll add their name, email address and phone number. Next, you’ll choose from a variety of email messages, including holidays. You’ll have an opportunity to read over and customize the note before you submit the invitation.
Family and friends also can contribute by mail. Ask them to fill out the deposit coupon, print it out and mail it with a check to: Bright Start Direct 529, P.O. Box 85298, Lincoln, NE 68501.
Gift-givers can print out and mail designed cards and certificates to let the recipient know a contribution has been made to their college savings fund.
You can also open a new Bright Start account. There is no minimum contribution requirement.
Contributing to a 529 Bright Start account before the end of the year is a great way to maximize your tax advantages. The State of Illinois offers an income tax deduction to Illinois taxpayers of up to $10,000 ($20,000 for married couples filing jointly) for contributions made to a Bright Start account. Tax deductions from contributions made in 2022 can be applied to tax returns filed in 2023.
Frerichs serves as Trustee and Administrator of two Illinois 529 College Savings programs: the Bright Startdirect-sold 529 program and the Bright Directions advisor-sold program. Since 2015, Frerichs has worked with Union Bank & Trust, the program manager, to reduce fees and ensure more investment dollars go directly tocollege savings. These changes have helped the plans grow from $7 billion I assets in 2015 to $15 billion in assets today.
Money in a 529 college savings account can be used at eligible educational institutions, including public and private, two-year, four-year colleges and universities, and certain technical and vocational schools. The investment grows tax-free when spent on qualified expenses.
For more information about the Treasurer’s Office 529 College Savings programs, visit illinoistreasurer.gov.
