Frequently Asked Questions

If you are a resident alien you qualify for a 529 benefit. To determine whether you are a resident alien, please refer to the IRS guidelines (Topic no. 851, Resident and nonresident aliens). If you are on a F, J, M, or Q visa, you are usually classed as a resident alien for tax purposes after 5 years in the USA. Typically if you did 4 years of undergrad in the US you will qualify for a 529 benefit your second year of graduate school. Going back to your home country during breaks is okay as long as the majority of your time is in the US.

Renest serves working students and universities by providing money management tools and services for qualified expenses. Renest also supports employers with employees who are students. Anybody who is a student and has taxable income can benefit from Renest. Examples:

• PhD students paid as researchers or teaching assistants
• Masters students paid as researchers or teaching assistants
• Part-time PhD or Masters students who have another job
• Undergraduate students who have a job
• Community college students with a job
• Trade school students with a job

529 plans, also known as 529 accounts, are tax-advantaged savings plans established by states under Section 529 of the federal tax codes. Money contributed and invested in a 529 plan grow tax-free and can be used for qualified education expenses without penalty or taxes. Typically they have been advertized towards parents and grandparents as savings accounts for their kids college fund. However, they help and can be used by anyone for any education expense from K-12 to PhDs.

In general, this term includes tuition, fees, books, supplies, and equipment required for enrollment or attendance at an eligible educational institution. Additionally, this includes certain expenses for computer, software, or internet access and related services to be used during enrollment. The term also includes certain room and board expenses for students attending at least half-time, and in the case of special needs beneficiaries, expenses for special needs services.

Unlike traditional savings or investment account, 529 plans are not subject to ordinary income, dividend, and capital gains tax. Additionally, 37 states and Washington, D.C. allow contributions to a 529 plan to be tax-deductible against state income tax (this means your state gives you money back for qualified education expenses).

Section 529 of federal law establishes that withdrawals from a 529 plan are not subject to ordinary income, dividend, and capital gains tax. Additionally, 37 states and Washington, D.C. allow contributions to a 529 plan to be tax-deductible against state income tax (deduction limits vary across states). These plans are established in order to incentivize education spending and help financially assist students during their education. Historically parents and grandparents have been the primary users of 529 accounts. This is because typically students did not work during their education. However times have changed and more than half of students work while going to school. At Renest we are focused on making the benefits of a 529 account available to all including the working students who need it most!

To begin, open an account with your state's 529 plan. Once you have established an account, you can fund the account using your existing bank account and/or directly via payroll. Contact your employer's HR / benefits department if you have questions about payroll contributions – the Renest team is happy to connect with your employer for support as well! Once you have funded your 529 account, you can select an investment allocation into equities and bonds funds (e.g., target-date funds, stock market indexes) or a high-yield savings fund. Your funds and investment growth can be withdrawn and used to pay for qualified education expenses. Funds and investment growth withdrawn and not used for qualified expenses will incur an income tax and 10% penalty on earnings.

Yes, Renest helps graduate students maximize their tax-benefits through 529 plans. We have automated the account opening and provide expense management tools to identify and track qualified spend. Renest handles the forms, tracking and account management so you get your maximum benefit easily.

We automate your 529 plan use, simplify your qualified expenses tracking, withdrawals, deposits and account creation. Renest is a financial technology company helping students track and manage qualified expenses to maximize tax-benefits associated with state 529 plans.

Yes, you can create a 529 for yourself. Any other 529 plans in your family, even if you are the beneficiary, do not conflict with you opening and benefitting from your own 529.

You open the 529 account in the state where you attend school. Since you make income in that state you will pay state taxes. However, states will refund a percentage of the amount they tax you if you open an account in and contribute to that state's 529 plan. If you make money in multiple states you can open a 529 account in each one. If you make money over the summer in a state where you do not go to school you can still make a 529 account in that state and benefit depending on that states rules. Renest can help you determine your benefit.

If you are enrolled part-time or full-time in a educational institution and/or program and have made or will make taxable income this year, you are considered a working student. You do not need to be a graduate student to unlock these benefits associated with a 529 plan.

If you are not enrolled part-time nor full-time in an educational institution and/or program during the summer, you need to adjust your 529 contributions to not include the summer months. Renest can help you determine how to best manage your 529 account during the summer. Typically, unless you are taking classes, graduate students are not enrolled as students over the summer and so expenses during those months are not qualified.

There are no limits on funds used for tuition expenses at an eligible educational institution. However, other expenses must be:

• Within the educational institution's official cost of attendance (COA) figures or;
• The invoiced price of any services operated by or products purchased from the educational institution

Additionally, a life-time amount of $10,000 can be used to pay student loans.

A 403(b) or 457(b) is a university / employer offered retirement savings plan that is funded through your paycheck. A 529 is an education savings plan that can be funded both through your employer and / or yourself. Money in a 403(b) can't be withdrawn before age 59½ without facing penalties. Money in a 529 account can be withdrawn to use for your everyday graduate student expenses - including rent and groceries.

An IRA is a retirement savings account used to save money for retirement. A 529 is an education savings plan that is used for education expenses. Money in an IRA can't be withdrawn before age 59½ without facing penalties. Money in a 529 account can be withdrawn to use for your everyday graduate student expenses - including rent and groceries.

Money in your 529 remains yours even after you leave your graduate program. You can reassign money in your account to family members (e.g., spouse, siblings, sons, daughters, cousins, nieces, nephews, and respective in-laws) to use for their education expenses. Additionally, $35,000 can be rolled into a Roth IRA (annual eligible rollover amount based on Roth IRA annual contribution limits).

Renest does not automatically file or prepare your federal or state taxes. You can use any service to prepare and file your state taxes. We will send you a form at the end of the calendar year explaining how to make sure you get your full state benefit independent of who does your taxes. If you would like Renest to file your state or federal taxes (even as an international student) please contact us here.