Hi, everyone. Jonathan from MEFA here, and today, we’ll look at MEFA’s U.Fund college investing plan, also known as the Massachusetts 529 plan. What is a 529 plan? It’s a tax-advantaged way to save for education, and here’s how it works. The account owner and others, like friends and family members, contribute to the plan, and the funds are invested in the market.

MEFA has partnered with Fidelity Investments to manage the investments, which grow tax-deferred. And when the student is ready to spend these funds, as long as they’re used for a qualified educational expense, there are no taxes on the earnings. These qualified education expenses include things like tuition, fees, food and housing, books, supplies, and equipment.

And the U.Fund is usable at any accredited college in the US and even foreign institutions eligible to receive federal funding. This applies to both undergraduate and graduate [00:01:00] degrees, and you also don’t have to use the funds at a traditional college. Funds can go toward accredited vocational programs and career training.

And if you can’t use 529 plans for your intended student, you can transfer to another family member. You can also use your 529 funds to pay for up to $20,000 a year in certain K through 12 schooling costs, any textbooks, fees, and equipment covering apprenticeship programs up to $10,000 annually, and for repaying up to $10,000 total in college loans.

In addition to these options, up to $35,000 of unused funds in a 529 account can be transferred into a Roth IRA for the beneficiary. And for those who pay Massachusetts taxes, the U.Fund contributions are deductible on state taxes up to $1,000 for individual filers and $2,000 for married filers filing jointly.

Now, if you have any questions, please call us at 800-449-MEFA or email us at [00:02:00] [email protected].