529 Plans

A 529 plan1 is a state-sponsored tax-advantaged program designed to help families save for college. You can enroll in any state-sponsored 529 plan, regardless of your state residency. A 529 Plan can be used to pay for tuition, fees, books, and certain room and board costs at qualified schools anywhere around the country including graduate schools. 


  • Tax-deferred earnings2
  • Tax-free distribution for qualified education expenses
  • State may offer income tax incentives3
  • Account owner retains control of the assets, not the beneficiary
  • Account owner can change beneficiary
  • Beneficiary can be anyone, including you
  • Low minimum initial contribution (varies by state plan)
  • No earnings restrictions on contributor
  • Professionally managed investment options
  • Forward-funding up to five years, allowing gift-tax free initial deposits of $70,000 per beneficiary ($14,000 gift tax-free maximum per year; five years per donor)4
  • If the parent is the account owner, considered parental asset for federal financial aid purposes


  • Limited investment options
  • Account owners can only invest cash, not appreciated securities
  • Nonqualified withdrawals are subject to ordinary income tax and a 10% federal tax penalty on earnings5
  • Account contributions and sizes vary by state plan


Income Limits
  • No Limits
Annual Contribution Limits
  • Maximum contribution limit varies per state plan
  • $12,000 gift tax-free maximum contribution per year per donor
  • Forward-Funding up to five years available
Tax Considerations
(See your tax advisor)
  • Federal and state tax-deferred earnings
  • Federal and state tax-exempt withdrawals for qualified education expenses; state tax incentive may be available
Details on State Plans The links below will take you to the state-sponsored 529 plan, where you can receive more information:
Compare Education Accounts

Interested in learning more?


  1. Depending upon the laws of the home state of the customer or designated beneficiary, favorable state tax treatment or other benefits offered by such home state for investing in 529 college savings plans may be available only if the customer invests in the home state's 529 college savings plan. Any state-based benefit offered with respect to a particular 529 college savings plan should be one of many appropriately weighed factors to be considered in making an investment decision; and the customer should consult with his or her financial, tax or other adviser to learn more about how state-based benefits (including any limitations) would apply to the customer's specific circumstances and also may wish to contact his or her state or any other 529 college savings plan to learn more about the features, benefits and limitations of that state's 529 college savings plan. Because each state has made its own plans and provision for state tax treatment, be sure to check with your local Commerce Brokerage Services, Inc. Financial Advisor at your nearest Commerce Bank location for details specific to your area.
  2. Earnings on non-qualified withdrawals are subject to federal income tax and may be subject to a 10% federal penalty tax, as well as state and local income taxes. The availability of tax or other benefits may be contingent on meeting other requirements.
  3. Some states have also elected to offer incentives for investing in any state's 529 Plan. Varies per state.
  4. In the event the donor does not survive the five-year period, a pro-rated amount will revert to the donor's taxable estate.
  5. Effective through 2015.
  • To send an email that contains confidential information, please visit the Secure Message Center where there are additional instructions about whether to use Secure Email or Online Banking messaging.
  • The information provided on this website is not meant as a recommendation or endorsement of any specific security or strategy. An individual’s situation can vary; therefore the information provided above should be relied upon only when coordinated with individual professional advice.
  • Mutual funds, annuities, and other investment products:
    Not FDIC-insured May lose value No bank guarantee
  • Commerce Brokerage Services, Inc., Member FINRA/SIPC, is a wholly owned subsidiary of Commerce Bank. This site is not intended for use by, or to provide any information to, investors in any state where Commerce Brokerage Services, Inc. is not registered or in any jurisdiction outside the United States of America where such use would be prohibited or otherwise regulated. Nothing on this web site shall be considered a solicitation to buy or an offer to sell a security to any person in any jurisdiction where such offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction.