Putting student refunds back to work
If your client’s beneficiary received a refund of qualified expenses from an eligible educational institution, they should consider re-contributing the proceeds into the student’s CollegeChoice Advisor 529 account so that the savings can be used for future qualified expenses.
Your clients can re-contribute a 529 account refund for money paid for qualified expenses back into the same or another 529 account and avoid incurring both federal and Indiana income tax or the recapture of the Indiana state income tax credit if:
- They re-contribute the refund to the student’s qualified tuition program account; and
- The re-contribution is made within 60 days of the date of the refund from the eligible educational institution or July 15, 2020, whichever date is later.
Here’s what your clients should do once their student receives a refund:
- Endorse the back of the check “payable to CollegeChoice Advisor 529.”
- Send in the check along with a signed letter of instruction stating that they want the funds deposited back into the student’s CollegeChoice Advisor 529 account as a re-contribution of a previous qualified withdrawal.
- If your client has already cashed the check, they can still re-contribute the amount into the student’s CollegeChoice Advisor 529 account. They should keep detailed records of all refund information for their taxes.
If you have questions about the CollegeChoice Advisor 529 Savings Plan, you can reach our Customer Service team by phone at 1.866.485.9413, Monday through Friday from 8 a.m. to 8 p.m., Eastern Time.
