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Money can be used for qualified expenses at any public, private or religious elementary or secondary school*; and eligible** post-secondary 2- or 4-year colleges, vocational/technical schools, or graduate schools anywhere in the country-not just in Kansas.
Examples of qualified expenses include tuition, mandatory fees, computers, books, supplies, equipment, and room and board.
*A maximum distribution of $10,000 per year, per student, is allowed as qualified education expenses for elementary or secondary school expenses. Any distribution over that amount is treated as taxable income.
**An eligible school is any accredited post-secondary institution that offers credit toward an undergraduate or graduate degree and is eligible for federal financial aid. Please review the Learning Quest Handbook for more information.
Learning Quest 529 accounts do not have a minimum intial investment. As of 2018, the account maximum balance is $402,000 per beneficiary.
Earnings grow tax-deferred at the federal and state level, and can be withdrawn tax-free if used for qualified* educational expenses**. Some states also offer a state tax deduction for contributions to a 529 plan (where applicable, view map).
For example, Kansas taxpayers receive an annual adjusted gross income deduction of up to $3,000 if single or $6,000 if married, filing jointly for their contributions per beneficiary, per year.
Contributions can be deducted from a taxable estate and are not subject to federal gift tax under a certain amount. For more on estate planning benefits and gift taxes, please review the Learning Quest Handbook .
*Non-qualified withdrawals are subject to federal and state income taxes and a 10% penalty.
**Beginning in 2018, distributions for educational expenses for elementary and secondary school (public, private, or religious) will be treated as qualified higher education expenses up to an aggregated limit of $10,000 per student. Amounts over that limit will be treated as taxable income.
There are no income restrictions for 529 plans.
No, there are no age restrictions. You can even open an account and make yourself the beneficiary as long as the funds are used for qualified expenses.
You can change the beneficiary designation to another eligible family member of the original beneficiary as outlined in the Learning Quest Handbook
The program management fee is charged to a portfolio for expenses incurred, including the administration and management of the program.
The fee is currently at an annual rate of 0.20%. It is charged against the assets of all the portfolios except the Cash and Cash Equivalents Portfolio and the Aggressive Index, Moderate Index and Conservative Index Portfolios.
If the account is owned by the parent of the student, the assets are counted as an asset of the parent.
Assets owned by a student will also be considered assets of the parent.
Typically, the person who opens the account names themselves as the owner and is authorized to act on the account.
Any U.S. citizen or resident, age 18 or older, can open or contribute to a Learning Quest account: parents, grandparents or others. The account owner maintains control of the money even after withdrawals begin.
Start a Learning Quest® 529 plan online today or call us at 1-800-579-2203
IRS Circular 230 Disclosure: American Century Companies, Inc. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with American Century Companies, Inc. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.
This information is for educational purposes only and is not intended as tax advice. Please consult your tax advisor for more detailed information or for advice regarding your individual situation.
This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.
The availability of tax or other state benefits (such as financial aid, scholarship funds and protection from creditors) may be conditioned on meeting certain requirements, such as residency, purpose for or timing of distributions, or other factors.
Before investing, carefully consider the plan's investment objectives, risks, charges and expenses. This information and more about the plan can be found in the Learning Quest Handbook, available by contacting your financial advisor or American Century Investment Services, Inc., Distributor, at 1-800-579-2203, and should be read carefully before investing. If you are not a Kansas taxpayer, consider before investing whether your or the beneficiary's home state offers a 529 Plan that provides its taxpayers with state tax and other benefits not available through this plan.
As with any investment, withdrawal value may be more or less than your original investment.
Notice: Accounts established under Learning Quest and their earnings are neither insured nor guaranteed by the State of Kansas, the Kansas State Treasurer or American Century Investments.
Administered by Kansas State Treasurer Lynn Rogers
Managed by American Century Investment Management, Inc.
Distributed by American Century Investment Services, Inc.