Santa Fe, NM, Dec. 05, 2024 (GLOBE NEWSWIRE) — Make gift giving more meaningful this holiday season by giving the gift of education. A 529 education savings plan provides the perfect opportunity to help individuals and their families achieve their educational goals. A 529 education savings plan is a tax-advantaged savings program intended to make education more affordable and attainable for families. While individuals and families can contribute to their own 529 plans, friends and relatives can make gift contributions to a loved one’s 529 plan, as well.
The Education Plan®, a 529 education savings plan sponsored by the State of New Mexico, is easy to set up and can be opened and contributed to in a variety of ways. While regular contributions provide the biggest impact on account growth long-term, any contributions that fit into your budget will make a difference.
The Education Plan makes it easy for friends and family to give a gift contribution directly into a 529 account at any time. Account owners have online access to gifting through Ugift® which provides a unique gift code to account owners to share with friends and family to invite them to give a gift contribution through a one-time gift or recurring gift contribution. There is a gifting section on The Education Plan website with downloadable gift coupons for holidays or special occasions as well as suggestions for how parents can broach the conversation with others about gift contributions to a 529 plan and a short video about how to accept gifts into a 529 account. The ReadySave 529 app, an app for The Education Plan 529 accounts, also makes it easy to invite friends and family to help give savings a boost.
As families look for gift ideas this holiday season, the College Savings Foundation (CSF) has released recent research results showing that families are using, planning for and willing to ask for education savings gifts for their children.
65% of parents across the country will ask friends or family to contribute to their child’s 529 plan for this holiday season and major events, according to the national non-profit’s 2024 State of Higher Education Survey of 1,000 parents across the country, up from 45% in 2023. The survey also showed that the majority of parents, 55%, are knowledgeable about gifting, aware that they can ask anyone for 529 gifts, up from 36% in 2023.
According to CSF, many 529 plans across the country have seen significant growth in overall gift contributions, with more than $550 million contributed in the first three quarters of 2024.
“If you are looking for a unique and special gift this year, consider the gift of education savings,” said Natalie Cordova, Executive Director of the New Mexico Education Trust Board, “Whether it’s a one-time gift or a recurring contribution, giving to your loved one’s 529 education savings plan account this holiday season can help well into the future.”
Contributions to a 529 account for a beneficiary are considered gifts for tax purposes. Effective January 1, 2025, the federal annual gift tax exclusion will increase from $18,000 in 2024 to $19,000 for a single individual and from $36,000 to $38,000 for married couples. For 529 plans, contributions can be made in a single year and applied against the annual gift tax exclusion equally over a five-year period, which will be $95,000 for a single contributor (or $190,000 for married couples) in 2025. This is another great way to jumpstart a child’s or grandchild’s education savings account while utilizing gifting exclusions, helping families invest more for the next generation.
In addition to making a thoughtful holiday gift, contributions to one of New Mexico’s sponsored 529 plans are tax-deductible from New Mexico state income taxes. 529 plan contributions also grow tax-free, and withdrawals are tax-free when used for qualified expenses. Savings in the 529 account can be used to pay for tuition, room and board, books, supplies, and computers at community colleges, universities, trade schools, or vocational schools across the United States. 529 plan funds can also be used to pay for K-12 tuition (up to $10,000 annually), apprenticeship expenses, and more.
For more information about The Education PlanⓇ and gifting, visit www.TheEducationPlan.com.
