Employee Matters

Education savings program
Are you looking for a way to save money for your children’s (or grandchildren’s) education?

The Wisconsin Office of the State Treasurer offers EdVest, a qualified state tuition program that helps families save for the cost of their children’s or grandchildren’s education. With EdVest, you can open an account on behalf of a designated beneficiary. Your contributions are placed in a trust and are directed into special investment portfolios designed and managed specifically for the program.

Which schools can my child attend and be eligible for these funds?
The funds are available for qualified higher-education expenses at any school — including technical, vocational and graduate schools. The money would be available for any eligible institution of higher education in the United States, and even some abroad. Use the money in your account for educational expenses including tuition, fees, books, and room and board.

Who looks after the contributions until the child needs them?
The Wisconsin College Savings Program Board and the Wisconsin state treasurer oversee the program. Strong Investments Inc., one of the country’s leading money managers, provides investment and administration for the program. EdVest offers investment options to suit any investor’s needs. There are market-based investment options, each with different allocations of stock, bond and cash management, or money market, funds. You can select a portfolio based on your personal risk tolerance, or the length of time until your child starts college.

What are the tax benefits to saving for children’s education through this program?
These programs are under the IRS Code 529, and earnings on your EdVest account grow federal and potentially state tax-free. Qualified withdrawals from a 529 plan are also federal — and potentially state — tax-free. Wisconsin residents owe no state income tax on qualified withdrawals. Contributions of up to $3,000 per dependent child, per tax year are deductible from Wisconsin taxable income. Grandparents who contribute to an EdVest account will be able to deduct up to $3,000 per grandchild, per tax year from their Wisconsin taxable income, beginning with their 2002 tax return.

Can I make my EdVest contributions through payroll deductions from my paycheck?
Not at this time. Make arrangements with EdVest to send checks directly to them, or have contributions electronically withdrawn from your checking or savings account at your bank or credit union.

Is there a minimum contribution amount needed to be involved in the EdVest program?
You can start building your account with an automatic investment plan of $25 per month through your bank or credit union. A low initial contribution of only $250 is required to open an account, and it is waived if you use the automatic investment plan option.

Where can I learn more about the EdVest Program?
Visit the Employee Compensation and Benefits Services Web site for more information and enrollment forms: http://www.bussvc.wisc.edu. Click on Payroll and Benefits, then on Employees, then Savings Plans and then on EdVest. You can also call the EdVest office, 24 hours a day, seven days a week, toll-free, at 1 (888) 338-3789.