The Utah Educational Savings Plan (UESP) is a Section 529 college savings plan administered by the Utah State Board of Regents and the Utah Higher Education Assistance Authority. It is Utah's official and only 529 Plan.
The Plan allows adults to save for qualified future higher education expenses of their children, grandchildren, or any other beneficiary.
Each Utah taxpayer who is a UESP account owner may contribute to the Plan and claim a credit if the beneficiary of the Plan was younger than 19 years of age when the account was established.
The 2008 maximum amount that may be contributed to a UESP account and used in the calculation of the Utah tax credit is $1,650 per beneficiary, or $3,300 per beneficiary if the taxpayer is married and filing a joint return. To qualify for the Utah tax credit, the UESP contribution must not have been deducted on your federal return.
The UESP credit is equal to 5 percent of the lesser of the actual contribution made during the year to the UESP account or the maximum amount stated in the previous paragraph.
A UESP account holder should receive form TC-675H, Statement of Contributions and Disbursements for the Utah Educational Savings Plan, from UESP. The amount of the credit will be shown on this form on line 1A or line 1B, whichever applies. (If you do not receive a form TC-675H, contact UESP to obtain a copy.)
Enter the UESP credit from the form TC-675H on your TC-40A, Part 3, using code 20. Attach the TC-40A to your TC-40, Utah Individual Income Tax Return.
Do not attach form TC-675H to your Utah TC-40. Keep this form with your tax records.
Note: The UESP credit is nonrefundable and any credit in excess of the tax liability for the year may not be carried back or carried forward.
The Utah tax credit is available only for contributions made by a UESP account owner to a UESP account. A credit is not available for contributions to higher education savings accounts in other states, or to accounts the taxpayer does not own.
Contributions to UESP accounts are not deductible for federal income tax purposes. However, earnings on investments in UESP accounts grow tax-deferred for federal and state purposes.
Disbursements from a UESP account will not be subject to federal income tax as long as the funds are used for qualified higher education expenses of the beneficiary at an eligible educational institutions, which generally includes any accredited public or private college, university or applied technology center anywhere in the country and even at some schools abroad (see www.fafsa.ed.gov for a list of such institutions).
For more detailed information on UESP accounts, or to request an enrollment kit, call 801-321-7188 or 1-800-418-2551. You can also download a Program Description and Account Agreement from the UESP website at www.uesp.org.