Parents and family members, or actually anyone, can contribute up to the annual gift tax exclusion limits, and beyond. Several people can fund 529 plans for the same person or child, and any one person can maintain as many 529 plans as they would like.
Each person can contribute up to the annual gift tax exclusion amount, which in 2016 is $14,000, per beneficiary. 529 plans have a special provision that allows the owner of the account to exceed the gift tax exclusion by contributing up to $70,000 at once – but no contributions can be made for 5 years after that, because this provision is really just allowing you to accelerate the contributions.
A spouse in a married couple can also contribute, so parents could hypothetically put $140,000 into a 529 plan in one year. As the account accumulates, you may approach total balance limit, which is different for each state. States tend to cap it around the amount it would cost to fund college and a master’s degree, or 7 years of expenses, generally. It can range from $250,000 to upwards of $400,000.
Once you have capped out a state’s allowed account balance, you may be able to fund another state’s 529, if desired, but it is also worth noting that if you have an account which names one beneficiary, you can change the beneficiary if you choose, or if the beneficiary won’t be using up the account balance, but a sibling will need it for medical school.
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