The Massachusetts 529 college savings plan
MEFA's U.Fund offers you flexibility as you save for a child's college education.
- Allows you to choose how your money is invested
- Can be used at any accredited college
- Up to $10,000 per year can be applied toward K-12 tuition expenses
- Easy and affordable to open
- Tax benefits
- Professionally managed by Fidelity Investments
How the U.Fund College Investing Plan works
- Open an account with any amount
- Investment options include a target date strategy based on the age of the beneficiary and a custom strategy that you create based on your investment objectives
- Earnings are not taxed as they accumulate, and withdrawals are tax-free when used for qualified education expenses*
- Massachusetts residents saving in the U.Fund can claim a Massachusetts state income tax deduction of up to $1,000 for single filers and up to $2,000 for married persons filing jointly. Note your deduction on Schedule Y (the income modifications/deductions section on most tax software).
- Savings can be used at any college or university that is eligible to participate in a student aid program administered by the U.S. Department of Education. Up to $10,000 per year can be applied toward tuition expenses for elementary, middle, and high schools (private, public, or religious). Although the money may come from multiple 529 college savings plan accounts, it will be aggregated on a per-beneficiary basis, and any distribution amount in excess of $10,000 will be subject to income and a 10% federal penalty tax. Learn about spending your 529 funds here
- Family members can add to your 529 account through College Gifting
- Account can have only one beneficiary, so each child should have a separate 529 college savings plan account
- If the designated beneficiary decides not to attend college, you may take a non-qualified withdrawal (earnings are subject to federal income taxes and a 10% federal penalty) or change the beneficiary to any of the following family members of the original beneficiary: son or daughter, stepson or stepdaughter, brother or sister, stepbrother or stepsister, father or mother, ancestor of father or mother, stepfather or stepmother, son or daughter of brother or sister, brother or sister of father or mother, son- or daughter-in-law, father- or mother-in-law, brother- or sister-in-law, spouse of original beneficiary or of any individual listed above, first cousin
*Qualified expenses include tuition, required fees, books, room, board (for students attending at least part time), and required supplies and equipment at a college or university, and tuition only at a K-12 institution.
Who is Eligible for the U.Fund College Investing Plan?
Anyone can open an account in the U.Fund. It doesn't matter which state you live in, and the beneficiary can be anyone you choose — a relative, a friend, or even yourself. You can change the beneficiary at any time to a family member of the original beneficiary.
All U.Fund account owners must be citizens or permanent residents of the United States
How to enroll in the U.Fund College Investing Plan
It's easy to open an account in the U.Fund. To learn more, visit the Fidelity Investments website.
Transfers and Rollovers
You can invest in a U.Fund account using assets from an existing UGMA, UTMA, or another state's 529 college savings plan account:
From a UGMA or UTMA Account
To transfer assets from a Uniform Gifts to Minors Act or Uniform Transfers to Minors account, first liquidate the UGMA/UTMA account assets and pay any applicable taxes, fees, and expenses. Then, invest the cash in a UGMA/UTMA 529 plan account, which is subject to the rules for both types of accounts. You may want to consult a tax professional regarding your specific tax situation. (Note that you may not change the beneficiary of a UGMA/UTMA 529 college savings plan account.)
From a 529 College Savings Plan
To roll over assets from another state's 529 plan into a U.Fund account, download the Fidelity College Investing Plan Rollover Form or call 800-544-2776. You may roll over a 529 plan account for each beneficiary once during any 12-month period.