NJBEST is the New Jersey 529 College Savings Plan and is offered and administered by the New Jersey Higher Education Student Assistance Authority (HESAA).
Website: www.njbest.com
Investment Options:
Age-Based – Designed for college savings, these portfolios simplify your investing decisions. Investing in funds actively managed by Franklin Templeton Investments, age-based asset allocations move into more conservative portfolios as college nears. Nearly 2/3 of NJBEST investors choose age-based portfolios.
Build Your Own – For those looking to take a more active role in their investment selection, NJBEST offers both allocation portfolios and individual portfolios that allow you to customize an investment strategy to match your individual preferences.
Minimum Investment:
You can open an NJBEST 529 College Savings Plan with as little as $25. The maximum aggregate plan balance per beneficiary is $305,000.
Tax Benefits:
Earnings grow federal income tax-free, and withdrawals for qualified higher education expenses are free from federal income taxes. Contributions are not tax-deductible.
Up to $10,000 per year may be withdrawn from 529 savings plans, federal income tax-free, if used for tuition expenses at private, public, and religious K-12 schools. In addition, up to $10,000 may be paid toward the principal or interest of a student loan for the beneficiary or sibling. What expenses will be regarded as “tuition” in the case of public schools may vary by state.
Tax benefits are conditioned on meeting certain requirements. Federal income tax, a 10% federal tax penalty, and state income tax and penalties may apply to nonqualified withdrawals of earnings. Generation-skipping tax may apply to substantial transfers to a beneficiary at least two generations below the contributor.
State Residency Requirements:
No state residency is required to participate in New Jersey 529 College Savings Plan. Qualified withdrawals made by New Jersey residents are not subject to New Jersey state income tax. Taxpayers of other states may be subject to state income taxes on qualified withdrawals and should consider whether their state of residence offers plans with alternative tax advantages.
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