Opening employer-sponsored CollegeAmerica® accounts

Get the information you need to open an employer-sponsored CollegeAmerica account for your client. Review eligibility, funding guidelines and more.

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Establishing the plan

Any employer with an employer identification number is eligible to establish an employer-sponsored CollegeAmerica plan.

Members of organizations or unions are not eligible.

For payroll deduction plans, the employer assigns a contact who is responsible for updating participant investment allocations and fund contributions.

Automated Clearing House (ACH) purchase plans are managed by each individual participant.

Opening a participant account

Yes, all employees, including part-time employees, are eligible to participate.

No, there are no setup or annual fees.

Account owners of an employer-sponsored CollegeAmerica account must:

Be an employee of the plan sponsor
Receive compensation from the employer. Volunteers or members of organizations are not eligible to participate.

Beneficiaries can be any age, provided they are a U.S. citizen or legal resident. The owner and beneficiary can be the same person.

Trusts, entities or UGMA/UTMA registrations are not allowed on employer-sponsored plans.

No, joint ownership is not permitted.

Yes, an employer-sponsored CollegeAmerica account can affect a beneficiary’s eligibility for federal financial aid. The account is regarded as either:

An asset of the parent if the student is a dependent of that individual
An asset of the student if the student is an independent student. For more information on which individuals are considered independent students, refer to the CollegeAmerica Program Description.

If someone other than the parent or student owns the account, it’s not considered an asset of either party.

Funding guidelines

Yes. For beneficiaries who have not graduated from high school at the time an employer-sponsored CollegeAmerica account is opened, the account owner has 30 years after the projected date of the beneficiary’s high school graduation to use all assets in the account.

For beneficiaries who have graduated from high school at the time an account is opened, the account owner has 30 years after the date the employer-sponsored CollegeAmerica account was opened to use all assets in the account.

The employer-sponsored CollegeAmerica account has two options from which employers can choose:

A payroll deduction plan, where employees have salary deferred from their paycheck and the employer’s checking account is drafted. (When the plan is established, instructions on how to make contributions using the Online Group Investments (OGI) website and login information are emailed to the employer and plan contact.)
An ACH purchase plan, where employees contribute directly from their personal bank accounts

For additional information on the OGI website and to learn how to get a plan started using OGI, visit Online Group Investments (OGI) for plan sponsors.

No, any money withheld from an employee’s paycheck to invest in a payroll deduction program is considered taxable income.

A $550,000-per-beneficiary contribution limit applies across all plans administered by Commonwealth Savers, including CollegeAmerica, Invest529® and existing Prepaid529^SM and CollegeWealth® accounts.

If the total value of the account falls below $550,000 for any reason, additional contributions can be made.

Yes, contributions to employer-sponsored CollegeAmerica accounts are considered gifts by the Internal Revenue Service (IRS) and may be subject to gift taxes. The amount the IRS permits to be excluded from the gift tax during a given year is based on the contributor’s tax-filing status. The gift tax exclusion limits for 2024 are:

Tax-filing status	2024 limits
Single	$18,000
Single with 5-year election^*	$90,000
Married filing jointly	$36,000
Married filing jointly with 5-year election^*	$180,000

^*The 5-year election allows an investor to gift up to their limit during one calendar year and treat the gift as having been made over 5 years. Additional gifts made to that beneficiary over the next 4 years after the year in which the one-time gift is made may reduce the donor’s lifetime gift and estate tax exemption. If the donor of an accelerated gift dies within the 5-year period, a portion of the transferred amount will be included in the donor’s estate for tax purposes.

Consult a tax advisor regarding your client’s specific situation.

The minimum amount is $25 per fund.

No, an employee’s employer-sponsored CollegeAmerica account cannot be linked with their personal accounts. Most employer-sponsored accounts are aggregated with other participant accounts that are part of the same plan or that are part of an employer-sponsored retirement plan offered by the same or an affiliated employer.

However, exceptions apply in the case the employee and/or the following are the sole participants in the plan:

Their spouse
Their spouse equivalent, if recognized under local law
Their children under the age of 21
Disabled adult children with ABLEAmerica® accounts

Return to Employer-sponsored CollegeAmerica 529 >

Contact us

Have questions or need additional support?
Contact us 8:00 a.m. to 7:00 p.m. ET, Monday through Friday.

(800) 421-0180

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All Capital Group trademarks mentioned are owned by The Capital Group Companies, Inc., an affiliated company or fund. All other company and product names mentioned are the property of their respective companies.

Use of this website is intended for U.S. residents only.

The guidelines and procedures provided in the Account Resource Center may not apply to networked accounts or accounts not directly held by American Funds. The guidelines and procedures provided also apply only to those retirement accounts or Coverdell ESAs invested in American Funds with Capital Bank and Trust Company (CB&T) as custodian. The guidelines and procedures provided in the Account Resource Center do not apply to plans held in our retirement plan solutions — PlanPremier, PlanPremier-TPA or RecordkeeperDirect. Information on the Account Resource Center may change periodically, and previously printed information may not be current. Please refer to capitalgroup.com for the most current information available.

Financial professionals should always contact their back office to determine if there are any restrictions on the use of American Funds products, tools, services, websites and literature.

CollegeAmerica is distributed by Capital Client Group, Inc. and sold through unaffiliated intermediaries.

Depending on your state of residence, there may be an in-state plan that provides state tax and other state benefits, such as financial aid, scholarship funds and protection from creditors, not available through CollegeAmerica. Before investing in any state’s 529 plan, investors should consult a tax advisor.

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About Us

Opening employer-sponsored CollegeAmerica® accounts

Establishing the plan

Opening a participant account

Funding guidelines

Return to Employer-sponsored CollegeAmerica 529 >

Contact us

Have questions or need additional support?
Contact us 8:00 a.m. to 7:00 p.m. ET, Monday through Friday.

(800) 421-0180

Investments

RESOURCES & RESEARCH

PORTFOLIO SOLUTIONS

MORE OFFERINGS

OUR APPROACH

Insights

Capital Ideas Pro™: Access to special events, courses and consulting to help you grow.

CATEGORIES

FEATURED

LEARNING CENTER

Tools & Resources

CLIENT ACCOUNT SUPPORT

INVESTMENT TOOLS

RETIREMENT PLANS

About Us

Opening employer-sponsored CollegeAmerica® accounts

Establishing the plan

What employers are eligible to establish an employer-sponsored CollegeAmerica plan?

Who handles contributions to the plan?

Opening a participant account

Are all employees eligible to participate in the plan?

Are there any fees to open or maintain an employer-sponsored CollegeAmerica account?

Who is eligible to be an owner or beneficiary of an employer-sponsored CollegeAmerica account?

Can an employer-sponsored CollegeAmerica account have multiple owners?

Can an employer-sponsored CollegeAmerica account impact a beneficiary’s eligibility for financial aid?

Funding guidelines

What share classes are available for employer-sponsored CollegeAmerica accounts?

Is there a time limit for using the funds in an employer-sponsored CollegeAmerica account?

What are the contribution options for an employer-sponsored CollegeAmerica plan?

Are employees’ payroll deductions tax-deferred?

What is the maximum contribution amount for an employer-sponsored CollegeAmerica account?

Are contributions to an employer-sponsored CollegeAmerica account subject to gift tax limits?

What is the minimum amount for a participant contribution?

Can employees link their employer-sponsored CollegeAmerica accounts with their personal accounts for a reduced sales charge?

Return to Employer-sponsored CollegeAmerica 529 >

Contact us

Have questions or need additional support? Contact us 8:00 a.m. to 7:00 p.m. ET, Monday through Friday.

(800) 421-0180

Capital Ideas Pro™:Access to special events, courses and consulting to help you grow.

Have questions or need additional support?
Contact us 8:00 a.m. to 7:00 p.m. ET, Monday through Friday.