Set up a scholarship account with Bright Start 529

When you contribute to a Bright Start 529 Plan account, any earnings are federal and Illinois income tax-deferred until withdrawn. Then withdrawals used to pay for qualified education expenses are federal and state income tax-free.

Bright Start 529 offers a variety of investment portfolios to fit your life situation, risk tolerance and savings goals. These vary in investment strategy and degree of risk, allowing you to select a portfolio or combination of portfolios that fit your needs and savings goals.

To compare our Bright Start 529 Investment Portfolios, visit our investment comparison page. For more information on the investment objectives, risks, charges and expenses, read the Plan Description.

No. Your Bright Start 529 funds can be used at any eligible university in the country—and even some abroad. This includes public and private colleges and universities, apprenticeships, community colleges, graduate schools and professional schools.¹ Up to $10,000 annually can be used toward K-12 tuition (per student).¹ In addition, your 529 can be used for student loan repayment up a $10,000 lifetime limit per individual.¹ Review a list of qualifying expenses and the state tax treatment of withdrawals for these expenses in the Plan Description.

Footnotes

1. ¹Withdrawals for tuition expenses at a public, private or religious elementary, middle or high school can be withdrawn free from federal tax. For Illinois taxpayers, these withdrawals may include recapture of tax deduction, state income taxes well as penalties. Withdrawals for registered apprenticeship programs and student loans can be withdrawn free from federal and Illinois income tax. If you are not an Illinois taxpayer, these withdrawals may include recapture of tax deduction, state income tax as well as penalties. You should talk to a qualified professional about how tax provisions affect your circumstances.↩

Qualified higher education expenses means, generally, the cost of tuition, fees, books, supplies and equipment required for the enrollment or attendance of a beneficiary at an eligible educational institution, certain costs of housing and food (room and board), the cost of computer or peripheral equipment, certain software, and internet access and related services if used primarily by the beneficiary during any of the years the beneficiary is enrolled at an eligible educational institution, as well as certain additional enrollment and attendance costs of beneficiaries with special needs. For both federal and Illinois tax purposes, any reference to a qualified higher education expense also includes a reference to (a) expenses for fees, books, supplies and equipment required for the participation of a beneficiary in an apprenticeship program and (b) amounts paid as principal or interest on any qualified education loan of either the beneficiary or a sibling of the beneficiary up to a lifetime limit of $10,000 per individual. Distributions treated as qualified higher education expenses with respect to the loans of a sibling of a beneficiary will count toward the limit of the sibling, not the beneficiary. Such loan repayments may impact student loan interest deductibility.

For federal but not Illinois tax purposes, any reference to a qualified higher education expense also includes a reference to tuition in connection with enrollment or attendance at a primary (i.e., elementary school) or secondary (i.e., middle school or high school) (together, referred to as “K-12”) public, private or religious school up to a maximum of $10,000 of distributions for such tuition expenses per taxable year per beneficiary from all 529 Plans.

State tax treatment of withdrawals is determined by the state where you file state income tax. Withdrawals for K-12 tuition expenses are not qualified withdrawals for Illinois tax purposes. Please consult with a tax advisor before withdrawing funds for any such expenses, rollovers or loan repayments.