Help clients with CollegeAmerica® contributions

ARTICLE TAKEAWAYS

  • Learn about a single sheet designed to help clients contribute to their CollegeAmerica accounts
  • Get answers to common questions about contributing to CollegeAmerica accounts

Investors often have questions about making contributions to their CollegeAmerica accounts. The How to contribute to your 529 single sheet can be shared with clients. It covers:

  • How your clients and their friends and family can contribute
  • Contribution limits and deadlines
  • What to expect at tax time
     
CollegeAmerica is a nationwide plan sponsored by Virginia 5 2 9.
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Common questions

Contributions can be made to the account via:

  • Client Accounts: Log in to the client’s account and click Buy. To add or update an automatic investment plan, click Automatic Transactions. Be sure to have the client’s bank information on hand if it’s not already on file.
  • Check: Checks should be made payable to CollegeAmerica and should include the account number and investment instructions. Mail the check to the service center near you.

Your clients’ friends and family can contribute to the account via: 

  • Check: Checks should be made payable to CollegeAmerica. They should include the account number and investment instructions and mail the check to the service center near them. 
     

Note: Third-party checks are not accepted.

  • Bill Pay: This option is set up directly with a bank. They should designate CollegeAmerica as the payee and provide the account number and fund name(s) or number(s) from a quarterly statement.
  • College savings gift cards and rewards programs: Capital Group also participates in many third-party college savings programs. They should confirm the requirements with the program provider.

There is no deadline. However, contributions count as gifts in the year they are made. Therefore, a contribution must be made by December 31 to count as a gift for that year.

Yes, contributions to CollegeAmerica accounts are considered gifts by the Internal Revenue Service (IRS) and may be subject to gift taxes. The amount the IRS permits to be excluded from the gift tax during a given year is based on the contributor’s tax-filing status. The gift tax exclusion limits for 2024 are:

Tax-filing status

2024 limits

Single

$18,000

Single with 5-year election*

$90,000

Married filing jointly

$36,000

Married filing jointly with 5-year election*

$180,000


* The 5-year election allows a contributor to gift up to their limit during one calendar year and treat the gift as having been made over 5 years. Additional gifts made to that beneficiary over the next 4 years after the year in which the one-time gift is made may reduce the donor’s lifetime gift and estate tax exemption. If the donor of an accelerated gift dies within the 5-year period, a portion of the transferred amount will be included in the donor’s estate for tax purposes.

Consult a tax advisor regarding your client’s specific situation.

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Contact us

Have questions or need additional support?
Contact us 8:00 a.m. to 7:00 p.m. ET, Monday through Friday.

(800) 421-0180

For financial professionals only. Not for use with the public.

All Capital Group trademarks mentioned are owned by The Capital Group Companies, Inc., an affiliated company or fund. All other company and product names mentioned are the property of their respective companies.

Use of this website is intended for U.S. residents only.

The guidelines and procedures provided in the Account Resource Center may not apply to networked accounts or accounts not directly held by American Funds. The guidelines and procedures provided also apply only to those retirement accounts or Coverdell ESAs invested in American Funds with Capital Bank and Trust Company (CB&T) as custodian. The guidelines and procedures provided in the Account Resource Center do not apply to plans held in our retirement plan solutions — PlanPremier, PlanPremier-TPA or RecordkeeperDirect. Information on the Account Resource Center may change periodically, and previously printed information may not be current. Please refer to capitalgroup.com for the most current information available.

Financial professionals should always contact their back office to determine if there are any restrictions on the use of American Funds products, tools, services, websites and literature.

CollegeAmerica is distributed by Capital Client Group, Inc. and sold through unaffiliated intermediaries.

Depending on your state of residence, there may be an in-state plan that provides state tax and other state benefits, such as financial aid, scholarship funds and protection from creditors, not available through CollegeAmerica. Before investing in any state’s 529 plan, investors should consult a tax advisor. 

This material does not constitute legal or tax advice. Investors should consult with their legal or tax advisors.