The account owner is the person who opens an Arkansas 529 GIFT Plan account and controls the assets held in the account. Anyone age 18 or older who is a U.S. resident or resident aliens with a Social Security number or taxpayer identification number, can open an Arkansas 529 GIFT Plan account. Corporations and certain other entities, including custodial and trust accounts, with a valid taxpayer identification number, also may participate.
The process of spreading an investment among various asset classes such as stocks, bonds, and cash.
Recurring Contributions/Automatic Investment Plan
Transfers to an Arkansas 529 GIFT Plan account can be made at a minimum of $10 per month/$30 per quarter from accounts held at a U.S. bank, savings and loan association, or credit union that is a member of the Automated Clearing House (ACH) network.
The money that is contributed to an Arkansas 529 GIFT Plan account.
The beneficiary is the person designated by the account owner on whose behalf higher-education expenses are expected to be paid, in whole or in part, using money from the Arkansas 529 GIFT Plan account. The beneficiary must be a U.S. citizen or resident alien with a valid Social Security or taxpayer identification number, and each account may only have one beneficiary. Anyone, including the account owner, can be a beneficiary.
The difference between the current value of an investment, and the cost basis of that investment.
Eligible Educational Institution
Generally, eligible educational institutions include two-year and four-year public and private colleges and universities, graduate and professional programs, and even some vocational programs. The school must be eligible to participate in the federal financial aid programs. A list of eligible educational institutions can be found at www.fafsa.ed.gov.
529 College Savings Plan
A college savings program sponsored by the states (or eligible educational institutions) and established under Internal Revenue Code Section 529.
The Maximum Contribution Limit established for the GIFT Plan currently in effect is $366,000 per designated beneficiary, from all sources (adjusted periodically).
Member of the Family
As defined under Section 529 of the Internal Revenue Code, a member of the family of a designated beneficiary is a person related to the designated beneficiary as follows: (i) son or daughter, or a descendent of either; (ii) stepson or stepdaughter; (iii) a brother, sister, stepbrother or stepsister, half brother or half sister; (iv) the father or mother, or an ancestor of either; (v) a stepfather or stepmother; (vi) a son or daughter of a brother or sister; (vii) a brother or sister of the father or mother; (viii) a son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law or sister-in-law; (ix) the spouse of the designated beneficiary or of any of the foregoing individuals; or (x) a first cousin. For purposes of this definition, a child includes a legally adopted child of an individual and shall be treated as the child of such individual by blood.
The initial contribution to an Arkansas 529 GIFT Plan account is $25. An Automatic Investment Plan can be set up for a minimum of $10 per month/$30 per quarter from accounts held at a U.S. bank, savings and loan association, or credit union that is a member of the Automated Clearing House (ACH) network. However, contributions made through automatic payroll deduction can be as low as $5 per pay period. Note: A periodic investment plan cannot assume a profit or protect against a loss in declining market.
Amounts in a 529 account can be withdrawn for purposes other than the payment of the designated beneficiary's qualified higher education expenses at an eligible educational institution. These are called non-qualified withdrawals. Earnings on non-qualified withdrawals are subject to federal income tax and may be subject to a 10% federal penalty tax, as well as state and local income taxes.
Qualified Higher Education Expenses
As defined by the Internal Revenue Code, withdrawals from a 529 account are tax-free when they are used to pay for tuition, room and board (with certain limitations), required books, required supplies, required equipment, mandatory fees and special needs services at an Eligible Educational Institution. (See "non-qualified withdrawals" for the implications of a non-qualified withdrawal.)
Money that you take out of an Arkansas 529 GIFT Plan account. Withdrawals are either Qualified Withdrawals or Non-Qualified Withdrawals.
Amounts in a 529 account can be withdrawn for Qualified Education Expenses at Eligible Educational Institutions. All other withdrawals are non-qualified.
This website contains links to other websites as a convenience to users. Neither the Arkansas 529 GIFT Plan, the state of Arkansas, Ascensus Broker Dealer Services, Inc., nor Vanguard endorses or takes any responsibility for any such websites or for any information contained therein.