Contributing to an Account

  1. How Are Contributions Made?
  2. Can I Wire a Contribution to a Bright Directions Account?
  3. Can Funds Be Transferred From Another 529-Qualified Tuition Program?
  4. Can Contributions Be Made From UGMA or UTMA Custodial Accounts?
  5. Can Nonowners Make Contributions to an Account?
  6. What Are the Limits on the Amount an Individual Can Contribute?
  7. What Happens to Contributions Made Over the Maximum Amount?

1. How Are Contributions Made?

  • Check (Deposit Coupon)
  • Money order
  • Payroll deduction (check with employer for availability)
  • Automatic investment plan
  • Rollover from another 529 plan

2. Can I Wire a Contribution to a Bright Directions Account?

  • Yes

3. Can Funds Be Transferred From Another 529-Qualified Tuition Program?

  • Bright Directions account can be funded by transferring funds from another 529 plan
  • Rollover will be income tax-free if beneficiary is not changed within a 12 month timeframe or is changed to a member of current beneficiary’s family

4. Can Contributions Be Made From UGMA or UTMA Custodial Accounts?

  • Assets held in an UGMA or UTMA account can be utilized to fund a Bright Directions account
  • Custodian must designate the associated minor as beneficiary and cannot change the beneficiary for the account
  • Beneficiary becomes account owner upon age of majority under the applicable UGMA or UTMA statute
  • May be a taxable transaction (consult your tax advisor)

5. Can Nonowners Make Contributions to an Account?

  • Anyone can contribute, including the beneficiary
  • State income tax deduction is available to anyone making a contribution
  • Account owner maintains control over all contributions

6. What Are the Limits on the Amount an Individual Can Contribute?

  • No minimum contribution required
  • No annual contribution requirements
  • Maximum aggregate balance for all accounts in all Illinois Section 529 programs is $320,000 per beneficiary
  • Once maximum is reached, no further contributions can be made for the beneficiary

7. What Happens to Contributions Made Over the Maximum Amount?

  • Program manager will notify the contributor
  • No contributions over the maximum amount will knowingly be accepted
  • Any contributions in excess of the maximum that are unknowingly accepted and any earnings thereon will be refunded