Benefits & Tax Advantages

Make the Kentucky Education Savings Plan Trust a part of your savings strategy.

Many families hope to see their child or loved one graduate from college someday, but it takes more than hope to get there. The Kentucky Education Savings Plan Trust (KESPT) is a 529 plan that can help your family get there.

Investing in education is a smart move and the tax advantages built into KESPT can make it an important part of your overall college funding strategy:

Tax Advantages

> See the Difference Tax Advantaged Savings Can Make.

Contributions and Any Earnings Used to Pay for Qualified Higher Education Expenses are Federal and Kentucky Income Tax-free
The earnings portion of any distributions used to pay for qualified higher education expenses will be free from federal and Kentucky income tax.

Federal Estate and Gift Tax Benefits
Contributions to KESPT may reduce the taxable value of your estate. For example, contributions to the Plan, together with all other gifts from the Account owner to the beneficiary, may qualify for an annual federal gift tax exclusion of $14,000 per donor ($28,000 for married contributors), per beneficiary. If an account owner's contribution to a KESPT account for a beneficiary in a single year exceeds $14,000 ($28,000 for married contributors), the account owner may elect to treat up to $70,000 of the contributions, or $140,000 for joint filers, as having been made over a period of up to five years for federal gift tax exclusion. Consult your tax advisor.

Flexible Features

Anyone May Open an Account
Parents, grandparents, relatives and friends who are U.S. citizens or resident aliens and at least 18 years of age may open an account and contribute to KESPT on behalf of a beneficiary. Kentucky state residency is not required. However, investors residing outside of Kentucky should consider their own state's plan first as it may have tax advantages that are only available through that state's plan.

Funds Can be Used at Eligible Schools Nationwide
Whether your beneficiary decides to go to a private or public college or university, in-state or out-of-state, trade or graduate school, funds in the account may be used at any eligible higher educational institution in the nation and many abroad.

Funds Can be Used for a Variety of Qualified Expenses
Funds can be used for tuition, mandatory fees, books, supplies, and equipment required for enrollment or attendance; certain room and board costs, certain expenses for "special needs" students.

Choice of Investment Options

Choice of Investments
KESPT offers a choice of 6 Investment Options so you can choose an option or a combination of options that best suit your needs.

Low Minimum Contribution
It's easy to open an account with KESPT. You have many ways to contribute and convenient ways to enroll. The minimum initial contribution is $25 per Investment Option. The minimum subsequent contribution to an account is $25 per Investment Option. However, if your employer allows payroll deduction, the minimum subsequent contribution to your Account may be as low as $15 per Investment Option per pay period.

No Income Limitations
There are no income limitations.

High Maximum Account Contribution Level of $350,000
You can contribute as much as $350,000 per beneficiary account as long as the total balance of all accounts for that beneficiary does not exceed $350,000. Accounts that have reached the maximum account balance limit may continue to accrue earnings.

Ability to Transfer to Another Beneficiary
If your beneficiary does not attend an eligible educational institution, you may name another eligible beneficiary for your account. The new beneficiary must be a member of the previous beneficiary's family, as described in the Disclosure Booklet (PDF), in order to avoid having this change treated as a non-qualified withdrawal.

Low Plan Fees

With the Kentucky Education Savings Plan Trust, there are no sales charges, start-up or maintenance fees. An annual asset-based management fee will be paid to TIAA-CREF Tuition Financing, Inc. to cover the cost of investment management and administrative services. The estimated underlying fund expenses range from 0.56% to 0.91%. Please note however, that the State reserves the right to change the current fee and impose new or additional fees, expenses, changes, or penalties in the future.

Managed By A Leading Financial Services Provider

The Commonwealth of Kentucky selected TIAA-CREF Tuition Financing, Inc. to serve as plan manager for KESPT. TIAA-CREF Tuition Financing, Inc. is an affiliate of TIAA-CREF, a financial services organization with more than 90 years of investment experience. Visit TIAA-CREF.

Easy Access to Your Account

You'll have online access to your Account information 24 hours a day, or you can call and speak to one of our college savings specialists Monday through Friday, 8:00 am - 8:00 pm Eastern Time. You'll receive quarterly and annual statements that show account activity. A separate confirmation statement will also be mailed following each transaction in your account.

You can also perform the following account transactions online: request a withdrawal from your account; rebalance funds among Investment Options, request e-Statement versus paper delivery, request e-Disclosure of Plan Disclosure Booklet and Participation Agreement and the Privacy Policy versus paper delivery, establish or change automatic contributions and view pending account contributions.

Funds Can be Used at Eligible Institutions Nationwide

Whether your beneficiary decides to go to a private or public college or university, in-state or out-of-state, trade or graduate school, funds in the account may be used at any eligible higher educational institution in the nation and many abroad.

Ability to Qualify for In-State Tuition Rates

If an account beneficiary who is covered under a KESPT vested participation agreement moves to another state, he or she can still qualify for Kentucky in-state tuition rates at certain institutions. A participation agreement becomes vested when, at the end of an 8-year continuous period, a net amount of $2,400 is contributed to the account while the beneficiary is a Kentucky resident. Additional restrictions apply. See the Disclosure Booklet for details.

Kentucky State Student Aid Eligibility

KESPT savings are not included in determining the amount of Kentucky need-based aid that a beneficiary will receive. However, other federal and institutional aid programs may take amounts in your account into consideration when determining eligibility.

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