Washington DC 529 Plan Rules And College Savings Options
Washington DC has a 529 plan called DC College Savings Plan that can help you save for college. The District of Columbia also has a 529 Able Plan as well.
If you live in Washington DC, these might be good options for you to save for college.
These programs are designed to help make college more affordable - so that you can get the education you need. By saving for college early on, you can make paying for college easier down the road.
If you're not quite sure how 529 plans work, check out this starter guide to What Is a 529 Plan?
There is also a specific order of operations to save for college that we recommend families follow. These programs are specific to the District of Columbia. Each state (or territory in this case) has different rules when it comes to 529 plan savings. Here are the Washington DC 529 plan rules.
Average Cost Of College In Washington DC
When saving for college in Washington DC, it's important to take into consideration the cost of attendance in the district. If you choose to go to an out-of-state school, you need to look at the average cost of attendance in that state.
There are 20 colleges and universities in the District of Columbia
The total average cost of college (Cost of Attendance) in Washington DC for in-state residents is $30,790 for 2024. This includes tuition, room and board, books and supplies, and other expenses.
It's important to remember that with so few skews, extremely expensive schools like George Washington University skew that number.
See how this compares to the average cost of college here. Keep in mind the average student loan debt by graduating class here.
Washington DC 529 Plan Rules And Tax Information
Tax savings is one of the big benefits of using a 529 plan to save for college. On a federal-level, there is no tax savings for contributions, but qualified distributions are tax-free.
Here are the special tax benefits and considerations for using a 529 plan in Washington DC.
Contributions
Washington DC offers a tax deduction for contributions to a 529 plan of up to $4,000 for single filers, and $8,000 for joint filers. There is a five-year carry-forward of excess contributions.
Minimum: $25
Maximum: Accepts contributions until all account balances for the same beneficiary reach $500,000.
Rollovers
Rollovers into the state plan are allowed.
Outbound rollovers within two years of establishing the account are subject to the recapture of prior D.C. tax deductions.
Qualified Distributions
Qualified distributions from a Washington DC and non-Washington DC 529 plan are tax-free.
K-12 Education
Washington DC does conform with Federal law in regard to using a 529 plan for K-12 tuition. See this guide: Using a 529 Plan For Elementary and High School Private Education.
Student Loans
Washington DC does conform with Federal law for using a 529 plan for student loans.
Rollover To Roth IRA
Washington DC does allow the rollover to a Roth IRA up to $35,000. Learn more about the 529 plan to Roth IRA rollover here.
Non-Qualified Distributions Taxes, Penalties, Recapture
A non-qualified withdrawal from a Washington DC 529 plan is subject to federal taxes and penalties, as well as being included in District of Columbia taxable income to the extent of prior District of Columbia tax deductions are recaptured.
Washington DC 529 College Savings Plan Options
Washington DC has one 529 plan option - one consumer plan.
Washington DC 529 Plan Facts
Washington DC has the following currently invested in 529 plans in the state as of December 31, 2023:
529 Plan | Number Of Accounts | Total Assets | Average Account Balance |
|---|---|---|---|
DC College Savings Plan | 40,133 | $1,224,199,687 | $30,504 |
DC College Saving Plan
The DC College Savings Plan is the name of Washington DC's 529 Plan. This plan offers a variety of investment options, including age-based portfolios that become more conservative as the child approaches college, and static investment fund options.
The funds offered include BlackRock, Vanguard, Dimensional Fund Advisors (DFA), and Schwab.
Fees:
There is a program management fee of 0.30%, including a 0.05% administrative fee paid to Washington DC.
The underlying funds all charge expense ratios from 0.15% to 0.74% depending on the investment option.
Who Should Use It:
We recommend that Washington DC residents use the DC College Savings Plan due to the tax benefits in the district.
We recommend that out-of-state residents utilize other plans.
Washington DC 529 Able Plan Options
529A Able accounts are accounts designed to help those with disabilities escape poverty and save for themselves. Learn more about 529A Able Plans here.
DC ABLE
The DC ABLE Plan is a 529A plan open to all residents in the District of Columbia.
This plan allows contributions of up to $18,000 per year from all sources.
It does have a minimum initial contribution amount of $25 per account.
The plan does not have an account maintenance fee. It also has a program management fee of 0.00% to 0.62%.
You can open a DC ABLE Plan here.
Other Programs To Save For College
A 529 plan is one way to save for college. Remember, we have a full guide on our approach to college savings here - and it helps you find other options.
If you're looking for ways to boost your college savings, check this out:
Backer
Backer is one of our favorite ways to save for college because they make gifting for college so easy. You can setup an account, link your 529 plan (in most states), and get a unique URL that you can share with friends and family to save for your children's college.
Plus, they have Backer Bucks, which allow you to earn rewards and rebates for the shopping you already do - directly deposited into your children's 529 plan.
Upromise
Upromise is another awesome tool to help you save for college because they have a lot of ways that you can earn money for your 529 plan. You can get rebates and rewards, and you can get cash back into your child's 529 plan by using the Upromise credit card.
Washington DC Financial Aid
Using a 529 plan isn't the only way to save money for college. Each state typically offers a variety of financial aid programs for their residents. These include scholarships and grants, and sometimes unique forgivable student loan opportunities.
Check out the list of Student Loan and Financial Aid Programs.
Return to the full list of 529 Plans By State.
Editor: Clint Proctor Reviewed by: Colin Graves