529 college savings plan benefits

Tax benefit for Kansas taxpayers

Kansas taxpayers receive an annual adjusted gross income deduction of up to $3,000 ($6,000 if married, filing jointly) for contributions per beneficiary, per year. To make a deduction for your contribution, it must be postmarked by December 31 or submitted online by 11:59p.m. Central time on December 31.

Estate and gift-tax benefits

You can contribute $14,000 (single)/$28,000 (if married, filing jointly) in a single year without incurring a gift tax.

In addition, "accelerated gifting" lets you make up to five years' worth of gifts ($70,000 if single/$140,000 if married, filing jointly) to a Learning Quest account in a single year without being subject to gift taxes. This benefit is unique to 529 plans like Learning Quest. Generally, your contributions to the account are removed from your taxable estate.1

NOTE: The gift tax exclusion amount is adjusted annually. To qualify, you'll need to file IRS Form 709 (Instructions for Form 709) to treat the gift as if it were made in equal payments over five years. To avoid gift tax, you should make no additional gifts to the beneficiary during that time. If a new beneficiary is named who is two or more generations younger than the current beneficiary, a generation-skipping tax may apply. You should consult a tax advisor to determine if you need to file this form.

1In the event you do not survive the five-year period, a pro-rated amount will revert back to your taxable estate.

The availability of tax or other benefits may be conditioned on meeting certain requirements, such as residency, purpose for or timing of distributions, or other factors.

IRS Circular 230 Disclosure: American Century 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 of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.