The Kansas Postsecondary Education Savings Program was created by the 1999 Kansas Legislature.
Kansas offers three 529 plans: Learning Quest and Learning Quest Advisor which are managed by American Century Investments and the Schwab 529 Plan which is managed by American Century Investments and distributed by Charles Schwab & Co., Inc. Each offers education savings accounts to help you pay higher education expenses for individuals that you designate or for yourself. The program also provides tax advantages under both Kansas and federal law. Kansas taxpayers 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, Learning Quest Advisor, or Schwab 529 account or contributions to a 529 plan sponsored by any other state.
A: The Kansas Learning Quest® 529 Education Savings Program is administered by Kansas State Treasurer, Ron Estes, who is responsible for the regulations governing the program, selecting the financial organization that manages the accounts, ensuring the program complies with all relevant Internal Revenue Service guidelines and monitoring investment performance with the assistance of an outside consultant and an advisory committee. 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 is in charge of managing accounts, providing customer service, educating account owners and communicating the benefits of the program..
A: There are tax advantages under both Kansas and federal law.
Earnings grow tax deferred under both federal and Kansas law and can be withdrawn tax free for qualified higher education expenses. In addition Kansas taxpayers 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, Learning Quest Advisor, or Schwab 529 account or contributions to a 529 plan sponsored by any other state.
How much can we put in the account?
A. Once the total balance for each beneficiary from all account owners exceeds $300,000, contributions will no longer be accepted. This is based on the average expenses of five years of higher education in Midwestern states and is adjusted annually.
A: 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 imposes tax consequences if the account is transferred to someone other than 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 This includes traditional public and private universities as well as community colleges, technical colleges, and vocational schools offering credit toward an undergraduate or graduate degree or other recognized postsecondary education credential, and are eligible to participate in federal student aid programs.
Federal law defines qualified educational expenses to include such things as tuition, room and board for students who are at least half time, books, required fees and supplies and special needs expenses for special needs students.
A: Taxpayers must pay federal and Kansas taxes on the earnings portion of a non-qualified withdrawal plus a 10% of earnings penalty is assessed at the federal level.
A: Visit the Kansas Learning Quest Educational Savings Program website or call 1-800-579-2203 to speak to a Learning Quest Specialist.
Disclaimer: As with any investment, withdrawal value may be more or less than your original investment. This information is for educational or informational purposes only and is not intended as tax advice. If you are not a Kansas resident, you may lose any tax benefits offered by your own state's plan if you invest in another state’s plan. Learning Quest, Learning Quest Advisor and the Schwab 529 are administered by Kansas State Treasurer Ron Estes, and managed by American Century Investment Management, Inc.