When Can You Open a 529 and Who Is Eligible?

A 529 plan is a tax-advantaged investment account designed to help individuals save for qualified education expenses. These plans allow investments to grow tax-free, and withdrawals remain free from federal income tax when used for eligible costs. The scope of qualified expenses has expanded to include college, graduate school, K-12 tuition, apprenticeship programs, and student loan repayments. This financial tool provides a flexible way to fund various educational pursuits.

Eligibility for Account Owners and Beneficiaries

Opening a 529 plan is broadly accessible, with few restrictions on who can be an account owner or a beneficiary. Any adult can establish a 529 account, including parents, grandparents, other relatives, or even non-relatives. Trusts and organizations are also permitted to open these accounts.

The beneficiary of a 529 plan can be anyone with a valid Social Security Number (SSN) or Taxpayer Identification Number (TIN). This includes the account owner, children, grandchildren, or an unrelated individual. There are no age limits for a beneficiary, meaning funds can be saved for individuals of any age, including adults pursuing continuing education.

Choosing a 529 Plan and Investment Options

Individuals can select a 529 plan offered by almost any state, not just their state of residence. Plans are typically categorized as either direct-sold or advisor-sold. Direct-sold plans are managed by the investor and often feature lower fees, while advisor-sold plans are offered through financial advisors who provide professional management, though they may incur higher costs.

Most 529 plans offer a selection of investment portfolios. Age-based portfolios automatically adjust their asset allocation from more aggressive to more conservative as the beneficiary approaches college age. Alternatively, static portfolios maintain a consistent asset allocation, allowing investors to select a risk level that aligns with their preferences. Evaluating plan fees, investment performance, and any potential state tax benefits for residents is an important step in the selection process.

Opening a 529 Account: Required Information

To open a 529 account, specific personal and financial details are necessary for both the account owner and the designated beneficiary. The account owner will need to provide their full legal name, current address, date of birth, Social Security Number or Taxpayer Identification Number, and contact information. This information establishes the individual who controls the account and its investments.

Similarly, the beneficiary’s full legal name, address, Social Security Number or Taxpayer Identification Number, and date of birth are required. An initial contribution amount is typically needed to activate the account, along with banking information, such as the routing and account numbers, for funding the initial deposit.

Making Contributions to a 529 Account

Once a 529 account is established, contributions can be made through various convenient methods. Common options include electronic bank transfers, either as a one-time payment or through recurring automatic investment plans (AIPs) set up for regular deposits. Contributions can also be made via check or, if offered by an employer, through payroll direct deposit.

While there are no federal annual contribution limits, contributions are considered gifts for tax purposes. In 2025, individuals can contribute up to $19,000 per beneficiary without triggering federal gift tax reporting requirements. A special rule permits “superfunding,” allowing up to five years’ worth of contributions, or $95,000 in 2025, to be made in a single year, provided no further contributions are made for that beneficiary during the next four years. Contributions are not federally tax-deductible, but many states offer residents state income tax deductions or credits for their contributions. Each state also sets its own lifetime maximum contribution limits, which are generally very high.