DC College Savings Plan - Information for Financial Professionals
DC College Savings Plan is the only 529 plan in the country that offers your clients the choice of single fund investments and age-based portfolios that include a full range of sustainable and responsible investment options. Sponsored by the Government of the District of Columbia and managed by Calvert Investments, the Plan offers special tax advantages that enable your clients to maximize their savings potential.
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Control Over Assets
Unlike traditional custodial accounts (UGMA or UTMA), the DC College Savings Plan allows your clients to control account assets—including withdrawals—even when the beneficiary reaches majority age. If the beneficiary chooses not to go to college, your client can designate a new beneficiary (a family member) without federal income tax consequences.
Anyone Can Contribute
Parents, friends, or relatives—even the beneficiary—can contribute to a DC College Savings Plan. And donors can contribute as little as $25 per month.
Investment Choice and Flexibility
The DC College Savings Plan offers two ways to create the portfolio most appropriate for your clients.
Customized Portfolio. Through individual equity, bond, and principal stability investment options, both actively and passively managed, you can customize your clients' portfolios to meet their needs.
Age-Based Portfolios. The five age-based portfolios feature professionally managed asset allocations with systematic rebalancing. Select the portfolio that matches the account beneficiary's age. As the beneficiary grows older, we will automatically move the account assets to the next appropriate age-based portfolio.
Sustainable and Responsible Funds
The DC College Savings Plan is the only plan in the country to feature a full range of investment options featuring Calvert's unique investment research process, which features two integral components: a rigorous review of financial performance, plus a thorough assessment of environmental, social, and governance performance. Only when a company meets Calvert's standards for both will we invest.
Proceeds Can Be Used at Any College
Unlike prepaid tuition programs, withdrawals from a DC College Savings Plan account can be used at any accredited college, vocational or technical school, university, or graduate school in the United States and some foreign countries to pay for tuition, fees, room and board, books, and other qualified expenses.
With the DC College Savings Plan, your clients pay no federal income tax on earnings from money invested in the Plan or on withdrawals used to pay for qualified education expenses. In some cases, your clients' earnings may also be exempt from state income tax.
- Gift Tax Benefits. The DC College Savings Plan offers your clients a special gift tax exemption. A participant may contribute up to $14,000 annually - or make a contribution of up to $70,000 once every five years ($140,000 for married couples filing jointly) - free of gift taxes, per beneficiary, up to an account maximum of $260,000.1
- Estate Tax Benefits. If the Plan donor dies during the five-year period, a pro-rata portion of the gift will be included in the donor's gross estate based on the number of years remaining in the five-year period, not including the year in which the donor died.