FAQs

ISave 529 is a tax-advantaged 529 plan intended to help an individual save and invest for education costs of behalf of a Beneficiary. The Plan is sponsored and administered by Iowa State Treasurer Roby Smith. Discover the benefits of ISave 529.

Anyone at least 18 years old who has a valid U.S. Social Security or Taxpayer Identification number and a physical address that is not a PO Box can open an ISave 529 account. The Account Owner does not have to be an Iowa resident.

A Beneficiary is the student the Account Owner is opening the account for, which can be anyone with a valid U.S. Social Security or Taxpayer Identification Number. The Beneficiary does not have to be an Iowa resident, and the Account Owner and Beneficiary do not have to be related. The Account Owner can also name themselves as the Beneficiary to use the money for their own education.

Yes. While there can be only one Beneficiary named for each account, you can open separate accounts for different students.

Yes. For example, a father, a mother, a grandparent and an uncle can each open a separate account for the same student and can also open separate accounts for other students. Each person who opens an account is eligible for an Iowa state tax deduction if they have Iowa state income.

No. The Beneficiary (student) must have a Social Security number or other Taxpayer Identification Number. Instead, most people open an account with themselves as the Beneficiary and owner, and then transfers the account to the newborn when he/she arrives.

Generally, yes. However, special rules may apply for custodians of assets formerly held in a Uniform Gifts/Transfers to Minors Act (UGMA/UTMA) account.

Yes. Account Owners and Beneficiaries may have multiple accounts in multiple states.

Yes. You may perform a tax-free rollover of a 529 account for the same student as often as once every 12 months.

You can move money in 1 of 2 ways:

• Direct rollover. Your current 529 plan custodian transfers money directly to ISave 529.
• Indirect rollover. You request a check from the current 529 plan custodian and reinvest it in ISave 529 within 60 days.

For a direct rollover, check with your current custodian to verify that it will accept the request for a rollover and to determine if any penalties will apply to the transaction.

When you request a direct rollover using either the Enrollment Form (for new accounts) or the Incoming Rollover Form (for existing accounts), you must provide us with a statement from the plan custodian showing the principal and earnings amounts in the 529 account at the time of distribution.

Yes. If your Beneficiary receives a refund from an eligible higher education institution for money paid for qualified higher education expenses, you may recontribute the refund to the account for which the student is the Beneficiary within 60 days. The recontributed amount cannot exceed the amount of the refund. Consult the Program Description for more information.

Yes. Anyone can contribute to your ISave 529 account with your permission. You can invite friends and relatives to write a check or make contributions via Ugift, which uses a unique code so you don’t have to disclose your account information. Discover more about contributions. 

Choose to contribute to your account from a variety of methods, including recurring contributions, electronic bank transfers, payroll direct deposit (through participating employers) and via check. Discover more about contributions.

Returns are never guaranteed and your account value will fluctuate with market performance. As with any investment, you can lose money by investing in ISave 529.

Keep in mind the holding period for education investors is short (generally 5 to 20 years), and you should consider investing more conservatively as the time approaches for you to begin making withdrawals. Before you select an investment option, you should carefully consider your investment time horizon and risk tolerance.

You can change the investments for your future contributions at any time. Under the federal laws that govern 529 plans, you are able to move money you have already contributed to a different portfolio within your account twice per calendar year or if you change the Beneficiary.

No. Each track's investments will automatically adjust as your student ages, shifting gradually from more aggressive investments to more conservative ones.

Your assets will be moved to the next portfolio in the track by the 5^th business day of the month following the student's 5^th, 7^th, 9^th, 11^th, 13^th, 15^th, 16^th, 17^th, 18^th and 19^th birthdays. You should monitor your investments over the years and make adjustments if appropriate.

The 16 investment options offered by ISave 529 have been selected specifically for the Plan and are the only investment options available.

The returns displayed on this site reflect past performance, are net of the management fee and are not a guarantee of future performance.

Keep in mind that you do not actually own shares in the underlying funds. Instead, you own portfolio units of ISave 529, which means the returns for a particular portfolio may vary from the returns of the underlying funds. Discover more about portfolio performance.

ISave 529 charges a total annual asset-based management fee of 0.17%. That means for every $1,000 you invest, you pay $1.70 in fees per year. There are no advisor fees or sales commissions, like those you may find with other types of plans.

Your account can be used for any purpose. However, to qualify for federal tax-free withdrawals on earnings, the money must be used for qualified education expenses for the Beneficiary at an eligible educational institution. Discover more about qualified expenses.

No. The money in your account may be used at any eligible educational institution in the U.S. and abroad that qualifies under federal guidelines.

If a postsecondary school has been assigned a federal school code by the Department of Education, then it is an eligible institution under Section 529. This includes most public and private colleges and universities, graduate and postgraduate schools, community colleges and certain trade and vocational schools. Qualified apprenticeship programs are also considered an eligible educational institution.

If you are interested in using funds for K-12 tuition, visit our Qualified Expenses page.

Withdrawals for qualified expenses are exempt from federal and state tax. For Account Owners who are Iowa taxpayers, all withdrawals are exempt from state income taxes. Discover more about qualified expenses.

Withdrawals can be requested online, by phone or by completing a Withdrawal Request Form (PDF) and submitting it to the Plan. Discover more about making withdrawals.

If that’s the case, you have options:

1. Stay invested. You can leave the money in the account in case the Beneficiary decides to attend school later. There's no age limit for using the money.
2. Change the Beneficiary. You can change the Beneficiary on your account at any time, provided the new Beneficiary is an eligible family member of the original Beneficiary.
3. Roll over to a ROTH IRA: If your account has been open for 15 or more years, you can roll the money over to the Beneficiary’s Roth IRA in a direct trustee to trustee transfer without incurring federal or Iowa tax penalties if the contributions and earnings you transfer have been in the account for more than five years.
4. Withdraw the money for other uses. You can always access the money in your account, regardless of what happens with the Beneficiary. If you withdraw for a non-qualified use, federally you’ll be taxed on just the earnings portion of your balance, plus a 10% penalty on the earnings. If you are an Iowa taxpayer and take a non-qualified withdrawal, any deduction previously taken must be added back to Iowa taxable income.

Refer to the Program Description for important information about eligible family members, Roth IRA rollovers and non-qualified withdrawals.

You can change the Beneficiary on your account at any time, provided the new Beneficiary is an eligible family member of the original Beneficiary. Find a complete list of eligible Beneficiaries in the Program Description.

You can maintain your ISave 529 account and continue to make contributions no matter where you live in the United States.

Money you contribute to a 529 account is generally treated as a completed gift to your student, but as the Account Owner, you still have control over it. If you die with money remaining in your account, it will not be included in your estate for federal estate tax purposes.

However, if you took advantage of the option to treat a single $85,000 contribution ($170,000 for married couples) to a 529 plan account as if it was made over 5 years and you die within 5 years of contributing, a prorated portion of the contribution will be subject to estate tax.

For more information, consult your tax advisor or estate planning attorney. Learn more about tax benefits.