Vermont 529 Plan
VT529
Morningstar NeutralQuick Facts
- Expense Ratio
- 0.39%
- Fee Range
- 0.55% - 1.49% annual fees
- Tax Benefit Type
- Tax Credit
- Deduction Limit (Single / Married)
- $2,500 / $5,000
- State Marginal Tax Rate
- 6.60%
- Carryforward
- None
- Income Limits
- Yes
- Any-State Deduction
- No
Should You Use Vermont's 529 Plan?
Vermont offers a tax credit for contributions to the in-state plan only. The 10% credit on contributions up to $2,500 translates to roughly $250 in annual tax savings. Compare this against the fee difference with a lower-cost out-of-state plan over your savings horizon.
Note that Vermont's tax benefit has income limits. High-income filers should verify they qualify before factoring the deduction into their plan comparison.
Vermont vs. Utah my529
Utah my529 is a commonly recommended low-cost reference plan. Here is how VT529 compares.
| VT529 | Utah my529 | |
|---|---|---|
| Expense Ratio | 0.39% | 0.13% |
| Morningstar Rating | neutral | gold |
| Tax Benefit | 10% tax credit on contributions up to $2,500 | 5% tax credit on contributions up to $2,290 |
| Fee Range | 0.55% - 1.49% annual fees | 0.17% - 0.64% annual fees |
| Investments | Age-based and individual portfolios | Vanguard age-based and individual funds |
How to Open VT529
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 Vermont's 529 plan?
Vermont's 529 plan is called VT529. 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 Vermont offer for 529 contributions?
Vermont offers a 10% tax credit on 529 contributions up to $2,500 per year (single filer) or $5,000 (married filing jointly). Income limits apply.
Is Vermont's 529 plan worth it?
It depends on your situation. VT529 has an expense ratio of 0.39% 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 Vermont?
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, Vermont's tax deduction only applies to contributions made to the in-state plan.
What is the expense ratio for Vermont's 529 plan?
The VT529 has an expense ratio of approximately 0.39% for the age-based portfolio option. The full fee range across all investment options is 0.55% - 1.49% annual fees. For comparison, Utah my529 charges approximately 0.13%.