Many of you know one of my favorite bonuses is the Ohio 529 College Advantage sign up bonus. Over the years we’ve accumulated over a dozen accounts there, and I know many of you have also opened accounts there. Good news for existing customers… their newest bonus is for us!
And it should be easy, so you can squeeze in the $50 bonuses from College Advantage for Free Money Friday between tournament games!
How to Get your $50 Bonus
- Make a contribution (or rollover!) of $3,000 to your existing College Advantage 529 by April 30, 2012.
- Keep the contribution in the account until June 15.
- Get a $50 bonus on or before June 15, 2012.
Terms and Conditions
- Offer available to existing CollegeAdvantage direct Account Owners who have an active CollegeAdvantage account opened before March 1, 2012.
- Only one $50 account bonus will be awarded per account.
- To qualify, the $3,000 contribution must be applied to one account and cannot be distributed over multiple accounts.
- Any withdrawal or transfer of the $3,000 contribution prior to June 15, 2012, disqualifies the account for the $50 bonus.
More on College Advantage Bonus
Rollovers. Clearly, the best part of this offer is the inclusion of rollovers. Since they specifically state that rollovers from other 529 plans qualify as a contribution, there is a great way to work this offer! I usually contribute to our home state 529 plan for the state tax deduction, but my final destination is always the Ohio 529 plan. Now, I just have to make sure I get the transfer done in time to take advantage of the bonus!
The Bonus. They will credit the $50 bonus to the CollegeAdvantage investment option with the largest balance as of June 15, 2012.
Stacking. From all of the terms and conditions it appears that the bonus is one per account. If I have multiple accounts, I can get the bonus for each account by strategically moving money around.
Taxes. If your money will only stay in the account long enough to pick up the bonus, you can find out how to handle the taxes in How Do You Handle College Advantage 529 Plan Taxes?
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How are distributions and earnings treated in these accounts? Specifically I’m wondering about a scenario whereby I would deposit $3000 and later on the same year I would take a 529 distribution in the amount of $3000. This is an existing account, with a balance. The key to this hypothetical scenario is that the distribution and contribution net each other out.
Will a 1099-Q be generated in this scenario? And if so, will this statement list gains/losses incurred while the money was on deposit?
Rakso,
Here’s a link on handling the taxes for these accounts: https://www.mydollarplan.com/529-plan-taxes/
To answer your specific question:
You’ll get a 1099Q which will show the distribution, basis, and earnings. They’ll calculate the earnings on a pro rata basis. So even it they net out, if you do this with an account that already has a large amount of earnings, you’d see more of a taxable event.
If you are planning to withdraw it, I’d stick to the accounts that have the smallest earnings on them so far.