The Utah Educational Savings Plan (UESP) is a Section 529 college savings plan administered and managed 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 the qualified future higher education expenses of their children, grandchildren, or any other qualified beneficiary.
For 2007, each Utah taxpayer who is a UESP account owner may claim a deduction on their Utah State tax return for contributions to UESP up to $1,620 per beneficiary if the beneficiary was younger than 19 years of age when the account was established. A married couple filing a joint return may deduct up to $3,240 per beneficiary.
UESP will issue form TC-675H to all Utah resident taxpayers with contributions made to a UESP account which they owned during the tax year. Utah account owners who moved from Utah in 2007 must contact UESP in order to obtain the TC-675H form.
The deduction may be claimed on form TC-40S, Part 3, using code 73.
Note: The Utah State tax deduction is only available for contributions to UESP accounts by UESP account owners. A Utah taxpayer cannot claim a Utah State tax deduction for contributions made to any other state's 529 plan. A Utah taxpayer may not claim a Utah State tax deduction for contributions made to a UESP account which they do not own.
A taxpayer who makes a qualified investment to a UESP account and whose tax is calculated for 2007 under the single rate tax calculation, is allowed a credit of 5.35 percent of the allowable UESP deduction (see above) as a nonrefundable credit against the tax. See page 11 of the 2007 instructions for more details and a worksheet.
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 institution, 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). This federal tax law is scheduled to expire on December 31, 2010. At that time, the federal tax law will revert to the tax law in effect on December 31, 2001.
There are no minimum contribution or balance requirements. As of January 1, 2006, contributions of up to $319,000 may be made to UESP for any one beneficiary.
You may request an enrollment kit from UESP by calling (800) 418-2551 or (801) 321-7188. You may also download an Account Agreement and Program Description from the UESP web site at www.uesp.org.
Investors should read the UESP Program Description for important information regarding the Plan. The Program Description can be downloaded from the UESP website or you can contact UESP directly to request a copy.
