31 May Am I eligible to open a 529 plan for my grandchildren?
Q. Can a Canadian citizen who resides in Canada set up 529 plans for grandchildren who live in New Jersey?
A. Thank you for your question.
Your grandchildren are lucky to have such a generous grandparent.
529 college savings plans require that the account owner be a U.S. citizen or resident alien, said Jody D’Agostini, a certified financial planner with Equitable Advisors/The Falcon Financial Group in Morristown.
She said you will need a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) to open the account.
“Alternatively, you can gift the money at up to $15,000 per year per donor and let the grandchild’s parent or another U.S. citizen that you trust `own’ the account with your grandchild as the beneficiary,” she said, noting that you don’t have to use New Jersey’s 529 plan but can select any one you prefer.
“You should look at the investment managers and their results, the fees in the plan, any tax advantages, as well as the limits allowed for the investment,” she said.
Before you make the move, take a look at how the account could impact the child’s eligibility for financial aid. 529 plans owned by a parent are treated differently than ones owned by a grandparent or other person.
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This story was originally published on May 31, 2021.
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