Here's What You Should Know About Missouri's 529 Education Plan

Every parent wants to be able to provide their child with a bright future, including educational opportunities. While it’s exciting to imagine all the successes they will achieve, taking steps to plan for a child’s education can be overwhelming, especially where finances are concerned. Fortunately for Missourians, there’s an easy way to start saving for your child’s education. With Missouri’s 529 Education Plan — MOST 529 — you can open an account for as little as $1.

Whether you’re a parent or grandparent, starting a MOST 529 account today for the student you love can help lessen the burden of paying out of pocket later.

What Is A 529 Savings Plan?

It’s a type of investment account you can use for education savings, which is usually sponsored by an individual state. Missouri’s 529 Plan, MOST 529, is a tax-free and trusted savings method helping families prepare for the big moments in their children’s lives.

The MOST 529 Education Plan allows parents or other family members, such as grandparents, to make tax-free monetary contributions to an investment account created on behalf of a child or loved one. Over time, the money contributed can potentially grow and may be available to pay for a child’s education, including tuition, fees and other items, such as books and computers.

How Does It Work?

Money contributed to a MOST 529 account can be used for a student’s education at any stage, whether the money is needed to help pay for K-12 education¹, college, an approved apprenticeship² program or towards student loan repayments³. The money parents save today can help lessen the need for taking on loans later. That means students can attend their desired school, whether they dream of attending a college, university, trade school or completing an apprenticeship program. Parents and family members can contribute up to a maximum of $550,000 for each child.

College and University Enrollment
For higher education needs, money invested through MOST 529 can be used to pay for tuition, room and board (with some limitations), books, supplies, fees and equipment required for an educational program. Other items, such as computers, may also qualify if used specifically for a student’s higher education.

K-12 Education
Parents who plan to enroll their child in a K-12 program, whether public, private or religious, can contribute to MOST 529, and the money that accumulates can be used to pay tuition up to $10,000 per student, per year. And, Missouri parents can use the money invested in MOST 529 to pay tuition with no state tax consequences.⁴

Apprenticeship Programs
For Missouri residents, some apprenticeship expenses now qualify for MOST 529 distributions. For example, fees, books, supplies and equipment required to attend and participate in an apprenticeship would qualify under the plan.

Are There Tax Benefits?

Investing in a MOST 529 Plan is not only a great way to invest in your child’s future, it’s also a great way to help grow funds faster while gaining tax benefits.

Unlike a savings account, which earns minimal interest and is considered taxable income, when you make a tax-free contribution to a MOST 529 account, you can deduct the total amount contributed each year when filing state income taxes.

Missouri taxpayers can deduct up to $16,000 if married, filing jointly, and up to $8,000 if filing single, of their MOST 529 contributions from their state income tax.

Another benefit is that a MOST 529 account holder will not have to pay state or federal income taxes on the money when it is withdrawn — as long as the money is used for qualified expenses.

How Do I Get Started?

Not only is opening a MOST 529 account simple, there is no fee for parents and family members to begin contributing to a loved one’s education fund. As you begin your investing journey, you can contribute as little as $1 each time, making it easy to save what works for you without maxing out your budget.

Investing early when children are young is a critical step to potentially get the greatest return on your money. Hypothetically, if you invest $1,200 per year in a tax-free account, such as a 529 plan, that may total $21,600 after 18 years. But, if that investment earns 5 percent annually, your payout can be about $35,400 over the same amount of time.

Family members and friends can also support your child’s education fund. Through the free Ugift service, those who want to make a special gift at birthdays, holidays or other significant milestones can contribute to the MOST 529 account. Through Ugift, families with a MOST 529 account receive a unique Ugift code for each student. That code can be shared with family members, who can then easily contribute toward the student’s education.

Also, families who enjoy getting discounts on services and earning rewards have the option of connecting their MOST 529 accounts to Upromise, a service that works with retailers to provide incentives for participants, including cashback and other rewards.

Contributions to a MOST 529 account may be made with a check, a recurring contribution, electronic transfer, payroll direct deposit (if available through your employer) and by transferring funds from other educational savings accounts.

Learn More About MOST 529

[Footnotes]

1. K-12 - tuition of up to $10,000 per student per year in connection with enrollment or attendance at an elementary or secondary public, private, or religious school.
2. The apprenticeship program must be registered and certified with the Secretary of Labor under the National Apprenticeship Act.
3. The loan repayment amount for an individual is subject to a lifetime limit of $10,000.
4. Earnings on non-qualified withdrawals may be subject to federal income tax and a 10% federal penalty tax, as well as state and local income taxes. The availability of tax or other benefits may be contingent on meeting other requirements.

For more information about MOST—Missouri’s 529 Education Plan, call 800-868-3585 or visit MissouriMost.org to obtain a Program Description, Privacy Policy, and Participation Agreement. Investment objectives, risks, charges, expenses, and other important information are included in this document; read and consider it carefully before investing.

If you are not a Missouri taxpayer, please consult a tax advisor. Consider before investing whether your or the designated beneficiary’s home state offers any state tax or other benefits that are only available for investments in such state’s qualified tuition program. Other state benefits may include financial aid, scholarship funds, and protection from creditors.

The Missouri Education Program (the “Program Trust”) is a trust created by the State of Missouri. When you invest in MOST—Missouri’s 529 Education Plan (the “Plan”), you are purchasing portfolio units issued by the Program Trust. Portfolio units are municipal securities. The Plan has been implemented and is administered by the Missouri Education Program Board (the “Board”). Ascensus College Savings Recordkeeping Services, LLC, serves as the Program Manager and Recordkeeping and Servicing Agent, and together with its affiliates, has overall responsibility for the day-to-day operations of the Plan. The Vanguard Group, Inc., serves as Investment Manager for the Plan. The Plan’s portfolios, although they invest in mutual funds, are not mutual funds.

Investment returns are not guaranteed, and you could lose money by investing in the Plan. Participants assume all investment risks, including the potential for loss of principal, as well as responsibility for any federal and state tax consequences.

Upromise and the Upromise logo are registered service marks of Upromise, Inc. Ugift is a registered service mark.