Maximizing 529 Contributions
An individual is married and has 2 kids. He would like to put in the maximum amount possible this year into his kid’s 529 plans. He has 4 accounts — one for each of the kids under both him and his wife (he has two accounts–one for each child– and she has two accounts–one for each child).
Can he do more than the 5-year front-loaded $70,000 per parent, per account this year without running into gifting issues? That would get him to a total of $280,000 between all 4 accounts. He would ideally like to have $500,000 for both children.
Thank you!
Permalink Submitted by mk foss on Fri, 2013-06-14 16:42
In addition to the gift tax limitaion for 529 plans there is also a limit in how much can be covered for the child’s education. Check the limits on the plans – it could be less than $280,000 per child.If he has not previously used the 5-year front loading, it can be done this year. A gift tax return must be filed to elect the 5 year treatment and any additional gifts to the children within the 5 year period will be reportable and will reduce the donor’s lifetime exemption. If he had previously used the 5 year loading in initially creating the returns, he can use the benefit again once the first 5 years have passed.