Can a Non-US Citizen Open a 529 Plan?

529 plans are a valuable way to accumulate funds for educational expenses. These tax-advantaged savings vehicles help save for future college costs. Non-US citizens can generally open a 529 plan, providing an opportunity to invest in education within the United States. Specific requirements apply to non-citizens establishing these accounts.

Eligibility for Non-US Citizens

Opening a 529 plan as a non-US citizen requires meeting identification and residency criteria. The account owner needs a US Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN). An ITIN serves as a tax processing number for individuals not eligible for an SSN but required to have a US taxpayer identification number. Most plans also require the account owner to provide a US mailing address.

Eligibility for 529 plans often centers on residency and tax identification rather than strictly on US citizenship. While many plans state that the account owner must be a US citizen or resident alien, having a valid SSN or ITIN generally fulfills the tax identification requirement for both the account owner and the beneficiary. This broadens access beyond only US citizens. The beneficiary also needs an SSN or ITIN. However, the beneficiary does not need to be a US citizen or a US resident to benefit from the plan.

Understanding 529 Plan Options

The two primary categories are 529 savings plans and prepaid tuition plans. Savings plans function like investment accounts, with contributions invested in various portfolios, and their value fluctuates with market performance. Prepaid tuition plans, conversely, allow for the purchase of tuition credits at current rates, often for specific in-state institutions. These prepaid plans are less common and often have more residency restrictions or limitations on eligible expenses compared to savings plans.

Each state sponsors its own 529 plan, with unique rules and investment options. You can open a 529 plan from any state, but some states offer tax benefits exclusively to their residents for contributions made to their in-state plans. Consider administrative fees, investment management fees, and other associated expenses, as these can vary significantly. Account owners also retain flexibility to change the beneficiary to another eligible family member without tax consequences or to roll over funds to another 529 plan.

Steps to Open a 529 Plan

Select a plan provider, typically by accessing the chosen state’s 529 plan website or consulting with a financial advisor. Many plans allow for online applications, while others may offer paper forms.

Key information requested includes names, dates of birth, addresses, and the SSN or ITIN for both the account owner and the beneficiary. Bank account information is also necessary for setting up initial and recurring contributions to the plan. Many plans have low minimum initial contribution requirements, sometimes as little as $10 or $25. After submitting the application and initial deposit, account owners receive confirmation and instructions for accessing their new account online.

Tax Implications for Non-Citizen Account Owners and Beneficiaries

Contributions to a 529 plan may be subject to US federal gift tax, particularly for non-resident alien account owners. Gifts exceeding the annual gift tax exclusion amount, which is $19,000 per recipient for 2025, may require filing a gift tax return (Form 709). However, for non-resident aliens, the US gift tax generally applies only to transfers of US-situated real property and tangible personal property, not intangible property like interests in a 529 plan.

A non-citizen account owner’s 529 plan balance could be subject to US estate tax if they pass away, depending on their domicile and the nature of the assets. The primary benefit of 529 plans is the federal income tax-free growth of earnings and tax-free withdrawals when funds are used for qualified education expenses. If withdrawals are not used for qualified educational expenses, the earnings portion becomes subject to federal income tax and a 10% federal penalty. State tax benefits, like deductions for contributions, are often limited to residents contributing to their home state’s plan. Non-US citizens should also consider potential tax implications in their country of residence, as foreign tax laws may treat 529 plans differently.