NC 529 Plan

The NC 529 Plan1 is a tax-advantaged2 education savings plan designed to enable participants to invest funds for the purpose of paying qualified education expenses of their designated beneficiaries on a flexible basis.

Eligibility

You do not have to be an SECU member or North Carolina resident to open a NC 529 Plan.

A Participant opens and invests funds in the 529 Account on behalf of a Beneficiary. The Participant is the owner of the Account. The Participant must be 18 years old and have a valid Social Security Number (SSN) or other taxpayer identification number (TIN). The Beneficiary is the person for whom the Participant is saving. The Beneficiary can be any individual, including the Participant, regardless of age, with a valid SSN or other TIN. The Beneficiary has no access to the Account or control of the funds (if the Beneficiary and Participant are different). The Participant can change the Beneficiary later, if needed, subject to the Plan rules.

Contributions

The minimum contribution is $25 for both the initial contribution and any subsequent contributions. You can make contributions as often as you like, including at regular intervals using automatic draft (ACH) or payroll deduction. The current maximum balance allowable is $500,000 for all NC 529 Accounts with the same Beneficiary. This limit is reviewed, and may be adjusted, annually. Accounts that have reached this amount cannot receive further contributions but can continue to accrue earnings in accordance with the terms of the applicable Investment Option(s).

Investment Options

The NC 529 Plan offers several investment options for you to choose from, including the Federally-Insured Deposit Account investment option made available by SECU. The Federally-Insured Deposit Account’s investment objective is to provide income plus protection of principal and earnings through federal share insurance by the National Credit Union Administration (NCUA) up to the applicable federal share insurance limits.3

Qualified Education Expenses

In general, the earnings on NC 529 Account funds withdrawn for payment of “Qualified Education Expenses” are not subject to federal or North Carolina state or local taxes. Qualified Education Expenses may include:

  • College expenses, including tuition, books, fees, room and board, a computer and more
  • Trade school expenses, as long as they are on the Federal Student Aid school list
  • Apprenticeship program expenses for programs registered with the U.S. Department of Labor or State Apprenticeship Agency
  • K-12 tuition expenses up to $10,000 per year, per child
  • Special-needs equipment
  • Student loan payments on behalf of the Beneficiary, or Beneficiary’s siblings up to $10,000 per individual
Funds from your NC 529 Account can be used at NC schools, out-of-state schools, and some international schools, as long as they are considered an Eligible Institution by the Department of Education.

The availability of tax benefits may be contingent on meeting other requirements.

Open an NC 529 Account

Accounts in the NC 529 Plan are not SECU deposit accounts. The NC 529 Plan is available and administered by College Foundation, Inc (CFNC).

You can open your NC 529 Account online through CFNC, or at your local branch. If you need assistance selecting an investment option, ask to schedule an appointment with an SECU investment representative.

When you visit the branch, please bring identifying information (name, address, Social Security number [SSN], date of birth) for both the Participant and Beneficiary. If you do not yet know the SSN of the Beneficiary, you may open an Account without it, but you must provide it later.
The features of a qualified tuition program such as the NC 529 Plan are complex and have tax implications. For complete information, and before you enroll, please carefully review the complete Program Description at CFNC or request one by calling the NC 529 Plan toll-free at (800) 600-3453, or emailing the Plan at savings@cfnc.org.

This description is not intended as individualized tax advice to any actual or potential participant, contributor, beneficiary or other interested person. The application of tax rules may vary based upon a person’s particular facts and circumstances. Please consult with your own attorney or tax advisor regarding the tax consequences of participation in the NC 529 Plan.

1 The NC 529 Plan is officially known as the North Carolina College Savings and Investment Program and is referred to as North Carolina's National College Savings Program. It is generally marketed under the shorter name, “NC 529 Plan.”
2 All descriptions of tax treatment of the NC 529 Plan are based on current federal and North Carolina state tax law. However, state tax law varies from state to state. Please consult your own attorney or tax advisor regarding the tax consequences specific to your participation in the NC 529 Plan.
3 When determining the amount of share insurance coverage available to a Participant, the Participant’s 529 Plan Account funds invested in the Federally-Insured Deposit Account investment option are aggregated with all other accounts (if any) held by the Participant at SECU with the same ownership rights and legal capacity.