Because taking a distribution from your Coverdell account in order to invest in a 529 plan is a qualified withdrawal, it is not subject to federal income tax. As long as the total of all accounts for the same beneficiary in a given state does not exceed that state's maximum contribution limit, a beneficiary can have more than one account under different account owners and under different state plans.
For South Carolina, the maximum contribution limit for all accounts per beneficiary is 6,000.
If the contribution is made by check, the account holder will receive a confirmation statement, but the name of the contributor will not be disclosed.
Once you’ve enrolled in Future Scholar, it’s easy to make a contributions.
These college savings investment vehicles provide tax advantages when funds are used for qualified college expenses. There are no age, income or family relationship limits. You can even open an account with yourself as the beneficiary, to help with your own higher educational expenses.
Family and friends can even establish Future Scholar accounts for the same child, as long as the total of all accounts does not exceed the overall contribution limit of 6,000 per beneficiary. As an account owner, you determine who will use the money.
Contributions can be made by check, through a one-time bank draft or by setting up a recurring payment from your bank account. 529 plan accounts accept only cash contributions, so the assets in an UGMA/UTMA account must be liquidated. Restrictions apply to Future Scholar 529 Plan accounts that receive assets from an UGMA/UTMA liquidation.Contributions to a single beneficiary, across all 529 accounts, cannot exceed 6,000 in South Carolina.You may contribute to more than one person's 529 account.e Gift invitations will include a link that will allow you to make a contribution directly from your bank account.If the contribution was made in response to an e Gift invitation, the account owner will receive an email notification that includes the name of the contributor.