What is an “NC 529” Plan?

“529” refers to Section 529 of the Internal Revenue Service code authorizing “qualified tuition programs” with special tax advantages to help individuals save for college. Federal law allows states to develop these college savings programs.

What is North Carolina’s 529 Plan?

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Officially known as the North Carolina College Savings and Investment Program and referred to as North Carolina’s National College Savings Program, the program is generally marketed under the shorter name, “NC 529 Plan”. The NC 529 Plan is open to residents of any state and funds can be used at any eligible college or university, anywhere in the country.

Account earnings in the NC 529 Plan are free from federal and, for NC taxpayers, state income taxes when used to pay for qualified higher education expenses, such as:

  • Tuition
  • Fees
  • Room and Board
  • Books
  • Computer and Associated Equipment
  • School-Required Supplies and Other Equipment

Who Can Open an Account?

Anyone who is at least 18 years old and has a Social Security (“SSN”) or other taxpayer identification number (“TIN”) can open an NC 529 Account. There are no enrollment fees or sales charges to enroll.

Frequently a parent opens an NC 529 Account for the benefit of a child or a grandparent opens one for a grandchild. But you can even open one for someone not related to you, or open an Account for yourself to cover your own college expenses.

As the Account owner (the “Participant”), you control the Account, not the Beneficiary (the one for whom you are saving money for college). You decide how and when to invest funds and to use Account assets.

Investment Options

You choose one or more Investment Options. The NC 529 Plan offers low-cost age-based and individual options that cover a range of financial strategies, from conservative to aggressive – whatever approach suits your investment style, time until college and risk tolerance.

You decide how much and when you want to invest. You can contribute occasionally or regularly, using check, electronic funds transfer, automatic draft, rollover, transfer or, if your employer offers, payroll deduction. The contribution minimum is only $25.

The IRS allows you to reallocate current assets you have invested twice per calendar year. You can change how you want your future contributions allocated at any time.