The state of Virginia has two different 529 state plans, the prepaid and the savings plans. The prepaid plan is called as the Virginia State Prepaid Education Program, while the savings plan is called as CollegeAmerica. Below are listed some of the features of these VA 529 plans.
Virginia State Prepaid Education Program
In a prepaid 529 plan, you can buy points at present status and then use them in the future when the child begins attending college. Virginia’s 529 plan has two options for making contributions – an eight-year contract can be made for $27,500, or a one-year contract in a community college can be made for $1,075. There are no annual fees in the program, but there is a small one-time enrollment fee of $85.
The following are some additional features:
1. There is an age restriction on the plan. The child for whom the plan is made should be at least in the ninth grade or younger.
2. The plan has guaranteed discounts. If the plan is made for a newborn baby, then there is a guaranteed 13% discount over the tuition fees, for a four-year university plan.
3. There is no maximum limit as such for contributing to a prepaid VA 529 plan. The contributions can go up to the highest public tuition fees in the state. When the time comes for giving out the earnings, the earnings can also go to the maximum limit.
4. There is a limit of $2,000 for deducting state tax on the contributions. Qualified withdrawals are exempt from state taxes.
5. The prepaid VA state plan is not allowed for nonresidents of the state.
This is a tax-advantaged plan in which contributions made are kept into an account that builds up till the time withdrawals are made. Withdrawals made for the paying the educational expenses of children are known as qualified withdrawals. The following are some features of this plan:-
1. The CollegeAmerica VA 529 plan is tax-deductible to a limit of $2,000, whether the contributor is a single person or a married couple filing jointly.
2. There is a maximum limit to which the amounts can be contributed. This limit is $250,000.
3. The plan is open to both instate and outstate residents of Virginia. In both cases, the minimum amount that can be contributed is $250, while there are additional purchases worth $50 that must be made. In addition there is an enrollment fee of $10 and an annual renewal fee, also of $10.
4. There is an automatic investment plan with this, to which annual contributions can be made.