Future Scholar is designed to make planning for college easier by providing you with tax-advantages not offered by other college savings vehicles.
- All of your Future Scholar earnings grow exempt from federal income taxes. For South Carolina residents earnings grow exempt from South Carolina state income taxes. 1
- Pay no Federal income taxes when you withdraw your money to pay for qualified higher educations expenses. 1
- In addition, South Carolina residents pay no South Carolina state income taxes when you withdraw money to pay for qualified higher education expenses. 1
- As a resident of South Carolina , you can also deduct your Future Scholar contributions from your South Carolina State Income Taxes. 2
- Parents, grandparents and other relatives can contribute up to $13,000 per year ($26,000 for married couples) without incurring federal gift taxes.
- You can contribute up to $65,000 ($130,000 for married couples) in a single five-year period without incurring gift-taxes, as long as there are no further gifts to the child in the same five-year period. 3
1 Tax treatment varies by state. The tax information set forth on this website is general in nature and does not constitute tax advice on the part of Columbia Management Distributors, Inc., its affiliates or the South Carolina Office of State Treasurer. Please contact your tax advisor before making any tax related decisions.
2 Lower limits may be set by South Carolina state law. Distributions not used for qualified education expenses must be included in South Carolina gross income to the extent those amounts were previously deducted from South Carolina taxable income.
3 Contributions between $13,000 and $65,000 made in one year can be prorated over a five-year period without incurring gift taxes or reducing your federal unified estate and gift tax credit. If you contribute less than the $65,000 maximum, additional contributions can be made without incurring federal gift taxes, up to a prorated level of $13,000 per year. Gift taxation may result if a contribution exceeds the available annual gift tax exclusion amount remaining for a given Beneficiary in the year of contribution. For contributions between $13,000 and $65,000 made in one year, if the account owner dies before the end of the five-year period, a prorated portion of the contribution may be included in his or her taxable estate. Columbia Management Distributors, Inc. or its affiliates does not provide tax advice. Please consult your tax and/or legal advisor for such guidance.
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