Ask the Treasurer

May 2019

Dear Fiona,

I’m going to open a ScholarShare 529 account in order to save for my daughter’s future education costs.

What types of schools and expenses can my college savings account be used for?

Melanie

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Dear Melanie,

I commend you for taking steps to save for your daughter’s education. Saving now with California’s ScholarShare 529 program will help ease the burden of covering your daughter’s future education costs. One of the great things about the ScholarShare 529 program is the amount of flexibility it offers.  Funds in the account may be withdrawn for a variety of higher education expenses at an eligible educational institution, including books, supplies, tuition, fees, computer and related technology costs, certain room and board expenses, and essential equipment required.  An eligible educational institution generally includes most accredited post-secondary educational institutions, including two- and four-year colleges and universities; technical, trade and vocational schools; graduate studies programs; and some institutions abroad.

In addition, a student may withdraw up to $10,000 annually without paying federal tax if the money is used for tuition expenses at a public, private or religious elementary, middle, or high school; however, withdrawals for such expenses are subject to state income tax and an additional 2.5 percent California tax. You should consult with a qualified advisor about how tax provisions affect your specific circumstances.

Don’t forget, you don’t have to save for your daughter’s education all on your own! Family and friends can make gifts to your ScholarShare 529 account for maximum growth potential.

For complete details and answers to more of your ScholarShare 529 questions, please visit our FAQs page at https://www.scholarshare529.com/help/faq/. You may also wish to read the program’s Disclosure Booklet, available online at https://www.scholarshare529.com/documents/ca_disclosure.pdf.

Thank you for your interest in saving for higher education with ScholarShare 529.

Sincerely,
Fiona

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Have a Question for the Treasurer?

Readers:
Send your questions for California State Treasurer Fiona Ma via email to: AskFiona@treasurer.ca.gov

Address letters to:
California State Treasurer Fiona Ma, Post Office Box 942809, Sacramento, CA 94209-0001