FAQs

FAQs2016-11-09T15:19:32-06:00
Who can open an account?2016-11-09T15:19:35-06:00

A Bright Directions account can be established by an individual, certain legal entities, a custodian under a state’s UGMA or UTMA statute, or a trustee of a trust. The account owner may also be a tax-exempt Section 501(c)(3) organization or state or local government that establishes an account as part of a scholarship program. The account owner must be at least 18 years of age with a valid Social Security number or a taxpayer identification number. The account owner must also have a valid address in the U.S. (not a P.O. Box).

How do I open an account?2016-03-28T13:52:13-05:00

Your financial advisor can guide you through the steps to get enrolled.

Who can be a beneficiary?2016-03-28T13:52:31-05:00

The beneficiary is the future student and may be an individual, including the account owner, of any age. The beneficiary must have a valid Social Security number or taxpayer identification number. Each account can have one designated beneficiary.

Who can make contributions?2016-03-28T13:52:47-05:00

Parents, grandparents, or other relatives—anyone, really—can contribute to a Bright Directions account on behalf of the beneficiary. All funds contributed to the account are controlled by the account owner.

What are the Illinois state income tax benefits?2017-12-14T13:29:21-06:00

Contributions are Illinois tax-deductible up to:1

  • $10,000 per Illinois taxpayer
  • $20,000 for married Illinois taxpayers filing a joint return

December 31 deadline for contributions. To be deductible for a calendar year you must make the contribution before the end of that given calendar year. Contributions postmarked on or before December 31, will be treated as having been made in the year in which it was sent.

This deduction is available to Illinois taxpayers. In addition, investments are not subject to Illinois state income tax while in a Bright Directions account. And when withdrawn for qualified college expenses, they are not subject to federal or Illinois state income tax.2

Ask your tax professional