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Who administers the program?
- The Kansas Learning Quest® 529 Education Savings Program is administered by Kansas State Treasurer, Lynn
Jenkins, CPA, who is responsible for the regulations governing the program, selecting
the financial organization that manages the accounts, and ensuring the program complies with
all relevant Internal Revenue Service guidelines. The Treasurer also must report each year to the
Kansas Legislature on the operations of the program.
The State of Kansas selected American Century® Investments, based in Kansas City, Missouri,
as the program manager. This mutual fund, brokerage and investment
services company will be in charge of managing accounts, providing customer service,
educating account owners and communicating the benefits of the program.
What are the tax advantages?
- There are tax advantages under both Kansas and federal law. There are no Kansas or federal income
taxes on the earnings in a Learning Quest account until funds are withdrawn. In addition,
a Kansas taxpayer may take an annual deduction of up to $3,000 ($6,000 for married, filing jointly) from Kansas adjusted gross income
for contributions into each beneficiary's Learning Quest account or any other state sponsored 529 plan for contributions made after January 1, 2007.
How much can we put in the account?
- Total contributions for each beneficiary from all account owners may not exceed the average
expenses of five years of higher education in Midwestern states, currently this amount is $290,000.
Contributions may be made in a lump sum or through smaller deposits over time.
Can anyone open or benefit from an account?
- Any U.S. citizen or resident may open an account or be a beneficiary.
There are no age or income limits.
It is possible to change an account beneficiary, but federal law requires the account to be
transferred to an eligible family member of the prior beneficiary. Family members include parents,
grandparents, aunts, uncles, first cousins, siblings/step-siblings and their spouses and children, in-laws,
and the spouse of the beneficiary.
State and local governments, and their agencies, and qualified charities also may open Learning Quest
accounts to fund scholarships. In such cases, the beneficiary or beneficiaries will be determined at the
time the scholarship is awarded.
What can the account be used for?
- Accounts may be used to pay qualified educational expenses at accredited postsecondary
institutions in Kansas or any other state.
Federal law defines qualified educational expenses to include such things as tuition, room and
board, books, required fees and supplies and special needs expenses for special needs students. Exceptions to the qualified educational expense
requirement are allowed if withdrawals are made because the beneficiary dies, becomes disabled
or receives a scholarship.
Federal law also sets the standards for qualifying as an accredited postsecondary institution.
An institution must offer credit toward an undergraduate or graduate degree or other recognized
postsecondary education credential, and must be eligible to participate in federal student aid
programs.
Qualified institutions include public and private universities, public
community colleges, technical colleges, vocational
schools, and licensed proprietary schools.
Is there a penalty for non-education purposes?
- A 10% penalty is assessed at the federal level on the earnings portion of withdrawals that are not used for qualified
educational purposes or do not fall under one of the allowable exceptions.
How can I open an account or get more information about Learning Quest?
- Visit the Kansas Learning Quest Educational Savings Program
website or call 1-800-579-2203 to speak to a Learning Quest Specialist.
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As with any investment, withdrawal value may be more or less than your original investment.
By investing in a 529 plan outside of your own state's plan, you may lose any tax benefits offered by your own state's plan.
This information is for educational or informational purposes only and is not intended as tax advice. Learning Quest is administered
by Kansas State Treasurer Lynn Jenkins, CPA, and managed by American Century Investment Management, Inc.
Notice: Accounts established under Learning Quest and their earnings are neither insured nor guaranteed by
the State of Kansas, the Kansas State Treasurer or American Century.
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