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Division of Taxation

Section 529 - Qualified Tuition Plans

A 529 plan is designed to help save for college. Contributions to such plans are not deductible, but the money grows tax-free while it remains in the plan. If you use the money for qualified educational expenses, the earnings remain tax-free. When you take distributions, any amounts that are used for higher education expenses (as defined under section 529 of the Internal Revenue Code) are excluded from income. A rollover from one account to another is considered a qualified distribution within the meaning of N.J.S.A. 54A:6-25 as long as it meets the requirement in section 529(c)(3)(C)(i) of the Internal Revenue Code.

Last Updated: Monday, 12/30/19