Indiana 529 Plan
Indiana529 Direct
Morningstar BronzeQuick Facts
- Expense Ratio
- 0.31%
- Fee Range
- 0.33% - 1.28% annual fees
- Tax Benefit Type
- Tax Credit
- Deduction Limit (Single / Married)
- $5,000 / $5,000
- State Marginal Tax Rate
- 2.95%
- Carryforward
- None
- Income Limits
- No
- Any-State Deduction
- No
Should You Use Indiana's 529 Plan?
Indiana offers a tax credit for contributions to the in-state plan only. The 20% credit on contributions up to $5,000 translates to roughly $1,000 in annual tax savings. Compare this against the fee difference with a lower-cost out-of-state plan over your savings horizon.
Indiana vs. Utah my529
Utah my529 is a commonly recommended low-cost reference plan. Here is how Indiana529 Direct compares.
| Indiana529 Direct | Utah my529 | |
|---|---|---|
| Expense Ratio | 0.31% | 0.13% |
| Morningstar Rating | bronze | gold |
| Tax Benefit | 20% tax credit on contributions up to $5,000 | 5% tax credit on contributions up to $2,290 |
| Fee Range | 0.33% - 1.28% annual fees | 0.17% - 0.64% annual fees |
| Investments | Age-based and individual portfolios | Vanguard age-based and individual funds |
How to Open Indiana529 Direct
You can open an account directly through the plan's website. You will need your Social Security number, the beneficiary's Social Security number, and your bank account information for funding contributions.
Frequently Asked Questions
What is Indiana's 529 plan?
Indiana's 529 plan is called Indiana529 Direct. It is a tax-advantaged college savings account that allows you to invest money for qualified education expenses. Earnings grow tax-free at the federal level, and withdrawals for qualified expenses are not taxed.
What tax credit does Indiana offer for 529 contributions?
Indiana offers a 20% tax credit on 529 contributions up to $5,000 per year (single filer) or $5,000 (married filing jointly).
Is Indiana's 529 plan worth it?
It depends on your situation. Indiana529 Direct has an expense ratio of 0.31% and offers a tax credit for contributions. Compare the value of the tax benefit against the fee difference with a lower-cost out-of-state plan like Utah my529 or Nevada Vanguard over your full savings horizon.
Can I use an out-of-state 529 plan in Indiana?
Yes. You can open a 529 plan in any state, regardless of where you live. The funds can be used for qualified education expenses at any accredited institution nationwide. However, Indiana's tax deduction only applies to contributions made to the in-state plan.
What is the expense ratio for Indiana's 529 plan?
The Indiana529 Direct has an expense ratio of approximately 0.31% for the age-based portfolio option. The full fee range across all investment options is 0.33% - 1.28% annual fees. For comparison, Utah my529 charges approximately 0.13%.