Learning Quest® Advisor FAQs
Answering Your Clients' Questions
- Anyone who is a U.S. citizen or resident can open an account and the account can be established for anyone, including one's self
- There are no age or income requirements
- Government entities and not-for-profit organizations may also use this program to fund scholarships
The account can be used without penalty to pay for qualified education expenses at accredited post-secondary institutions anywhere in the U.S. Your client may withdraw money at any time; Qualified withdrawals may be used for tuition, fees, books, supplies, equipment required for enrollment, and room and board.
The earnings portion of a withdrawal used for qualified education expenses is federally tax-free. (non-qualified withdrawals are subject to 10% penalty and state and federal income taxes)
No matter which state they live in, they can invest in Learning Quest Advisor.
If your client does not use the withdrawal for qualified educational expenses, the earnings portion is subject to a 10% federal penalty tax plus required taxes. Your client can request a penalty-free withdrawal in the event of the death or disability of the student or if the student receives a scholarship.
You can change the beneficiary at any time in order to keep the account going and avoid (or at least delay) taking non-qualified withdrawals when the original beneficiary doesn't need those funds.
The state income tax advantage should not be the primary reason to invest in Learning Quest Advisor. Instead, consider the goal and related factors that will be critical to creating adequate investment needed to pay for college:
- Consider who's managing the underlying investments to ensure that experienced investment managers, skilled at managing many different investment styles through many different market conditions, are overseeing the account.
- There is a choice of three tracks that vary in risk tolerance and the time until the money is needed. Some state plans may not be properly diversified or do not rebalance. These are important factors that allow the money to grow in order to satisfy the ever-increasing cost of college.
- Out-of-state residents get the same federal tax-deferred and tax-free treatment as in-state residents.
Yes. Contributions can be made to both a Coverdell Education Savings Account and a 529 college savings plan in the same year for the same beneficiary. Clients may also transfer money from an Education Savings Account to Learning Quest Advisor. This provision also includes rollovers from one state's 529 plan to another state's 529 plan once per 12-month period.
For Kansas taxpayers UGMA/UTMA and Coverdell ESA "transfers" will allow for a deduction for the beneficiary (who must become the account owner) for the full amount (up to $3,000 for single filers and $6,000 for married filing jointly) transferred into the Learning Quest account. Keep in mind that the "new" account owner/beneficiary must have an income to take a deduction.
There should be no reduction in death benefit or survivor benefit. Presently, there are no rules that govern 529s with Social Security in this regard.
Yes, account access is provided through 529 QuickView.
The availability of tax or other benefits may be conditioned on meeting certain requirements, such as residency, purpose for or timing of distributions, or other factors.
Before investing, carefully consider the plan's investment objectives, risks, charges and expenses. This information and more about the plan can be found in the Learning Quest Advisor Handbook, available by contacting your financial advisor or American Century Investment Services, Inc., Distributor, at 1-800-345-6488, and should be read carefully before investing. If you are not a Kansas taxpayer, consider before investing whether your or the beneficiary's home state offers a 529 Plan that provides its taxpayers with state tax and other benefits not available through this plan.
Notice: Accounts established under Learning Quest and their earnings are neither insured nor guaranteed by the State of Kansas, the Kansas State Treasurer or American Century Investments.
Administered by Kansas State Treasurer Ron Estes
Managed by American Century Investment Management, Inc.