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When it comes to saving money for college, there are many options available—each with their own set of benefits. The best option for you depends on multiple factors, like your savings goals, risk tolerance and investment preferences.

Oklahoma 529 checks all the right boxes

529 plans are one of the most popular ways families choose to save for college. Other common methods include Roth IRAs or a standard bank savings account.*

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  • Can reduce your state taxable income up to $20,000
  • Limitations apply.
  • Tax-deferred growth
  • Tax free withdrawals for qualified education expenses
  • Investment options
  • No income restrictions
  • No age restrictions for withdrawals
  • High annual contribution limits

Roth IRA2

  • No state tax deductions
  • Tax-deferred growth
  • Potential Tax Free withdrawals**
  • Investment options
  • Income restrictions
  • Age restrictions for withdrawals
  • Lower contribution limits

Bank Savings Account3

  • No state tax deductions
  • No tax-deferred growth
  • No tax-free withdrawals
  • No investment options
  • No income restrictions
  • No age restrictions for withdrawals
  • High annual contribution limits

Moreover, money saved in a 529 does not disqualify students for financial aid. 529 assets are typically treated as belonging to the parent (or grandparent, etc.) and count less in Expected Family Contribution (EFC) calculations than assets held in the child’s name.

Learn more at https://studentaid.gov/ or check with the schools you are considering.

Why choose Oklahoma 529

  • Oklahoma 529 offers a unique tax deduction to Oklahoma taxpayers—up to $20,000 for joint filers or $10,000 for single filers.4 Contributions in excess of these amounts may be deducted over the following five years.
  • With an Oklahoma 529, any growth you see over time won’t be subject to taxes down the line if used for qualified higher education expenses.
  • Oklahoma 529 savings do not disqualify students from financial aid, and count less in Expected Family Contribution than assets held in the child’s name.5

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Have any questions about ways to save for education? We have answers.

Oklahoma 529 provides a unique set of benefits that can mean more flexibility and growth potential, including:

  • Oklahoma state tax deduction
  • Tax-free qualified withdrawals
  • Low fees and expenses
  • Smart investment choices

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No. Your Oklahoma 529 funds can be used at any accredited university in the country—and even some abroad. This includes public and private colleges and universities, CareerTech centers, community colleges, graduate schools and professional schools and costs associated with apprenticeships. In addition, up to $10,000 annually can be used toward K-12 tuition (per student) from all 529 plans and student loan repayment (lifetime limit).1 For a list of qualifying expenses and the state tax treatment of withdrawals for these expenses, view the Plan Description.

Footnotes

  1. 1Withdrawals for tuition expenses at a public, private or religious elementary, middle, or high school, registered apprenticeship programs, and student loans can be withdrawn free from federal and Oklahoma income tax. If you are not an Oklahoma taxpayer, these withdrawals may include recapture of tax deduction, state income tax as well as penalties. You should talk to a qualified professional about how tax provisions affect your circumstances.

    Apprenticeship programs must be registered and certified with the Secretary of Labor under the National Apprenticeship Act. Student loan repayment subject to a lifetime limit of $10,000 per individual when using a 529 plan.

When you contribute to an Oklahoma 529, any account earnings can grow federal and Oklahoma income tax-deferred until withdrawn. In addition, withdrawals used to pay for qualified education expenses will be free from federal and Oklahoma income tax.

If you are an Oklahoma taxpayer, your contributions to your Oklahoma 529 account may be deducted from state taxable income. This deduction is for a maximum of $10,000 per year for a single return and $20,000 per year for a joint return. You do not have to be related to the beneficiary to take advantage of this deduction. The state tax deadline is April 15 of the following year.