22 May Can a company contribute to a 529 plan?

Q. Can a corporation make a contribution to a 529 plan? It would be a one-time contribution.
— Saver, maybe

A. 529 plans are a great way to pay for higher education.

The funds grow tax-deferred, and become fully tax-free if you use them for qualified education expenses.

Anyone can contribute to a 529 plan, said Jody D’Agostini, a certified financial planner with Equitable Advisors/The Falcon Financial Group in Morristown.

She said all plans accept third party contributions.

“Corporations can make a one-time contribution up to the gifting limit, which is currently $17,000 a year,” she said. “They could also make a larger gift and fund five years at one-time for a total of $85,000.”

In that case, they can’t make another contribution until the sixth year, she said.

But, she said, a corporation can’t own a 529 plan.

“They are only available to US citizens and resident aliens,” she said.

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This story was originally published on May 22, 2023.

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