Gifting FAQ
Here are answers to some of the questions we receive on gifting. Have another question? Give us a call toll-free at 1-888-799-CHET (2438), Mon - Fri, 8:00 am - 8:00 pm ET.
For Account Owners
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As an account owner, how do I invite family and friends to give a gift?
The next time family members or friends ask for suggestions about what to get your child as a gift, suggest that they contribute to the child’s future college education. Assure friends or family that while it may not seem as ‘fun’ to open a CHET account, the child will grow up and understand the intent and impact of the gift—remembering it long after toys or clothes are gone! Have a conversation with family or friends to explain the process, or invite them to visit this site to learn more. Then, friends and family can contribute to your loved one’s CHET account by submitting a check or money order (with the account number* clearly indicated) or open their own CHET account for your loved one. Either way, their contribution can be symbolized with a CHET Gift of Education Certificate. Gift of Education Certificates are available for numerous occasions such as birthdays, graduation, and Christmas. Your family members and friends can simply print and complete the Gift of Education Certificate and include in a card or wrap with a bow.
Is there a minimum amount for gifting?
Yes, as with regular contributions**, the minimum amount friends and family members may contribute (gift) to your existing account is $25. Contributions are permitted by personal checks (excluding starter checks, credit card convenience checks and counter checks), bank drafts, teller’s checks, and checks issued by a financial institution payable to the account owner and endorsed over to the CHET plan, and third-party personal checks up to $10,000. Checks must be drawn on a U.S. banking institution and must be payable in U.S. dollars.
Can friends and family members make changes to my CHET account?
No, as the account owner, you have complete control of your account. Friends and family members can only contribute to your account. They cannot perform any other transactions.
Can friends and family members open a new CHET account as a gift for my beneficiary?
Yes. Anyone with a Social Security Number (SSN) or federal Taxpayer Identification Number can open an account with as little as $25 ($15 if their employer offers payroll deduction.) They will need to know the SSN or federal Taxpayer Identification Number of your beneficiary before they can finalize the enrollment process. They can symbolize their gift by downloading a Gift of Education Certificate and presenting it to the beneficiary.
Can my beneficiary have more than one CHET account?
Each account can have only one account owner and one beneficiary. However, each beneficiary may have more than one account, and you may open separate accounts for as many different beneficiaries as you wish. Friends and family members may open a separate account for your beneficiary. They will need to know the Social Security Number (SSN) or federal Taxpayer Identification Number of your beneficiary before they can finalize the enrollment process.
What impact do IRS Gift Law Limits have?
Contributions to the CHET plan may reduce the taxable value of your estate. Your contributions, together with all other gifts from you to the designated beneficiary, may qualify for an annual federal gift tax exclusion of $13,000 per donor, per designated beneficiary for 2010 or 2011. If your contribution to an account in the CHET plan exceeds that $13,000 (or $26,000 for joint filers) exclusion, you may elect to treat up to $65,000 of the contributions (or $130,000 for joint filers) as having been made over a period of up to five years for purposes of determining your annual federal gift tax exclusion. Consult your tax advisor for additional details. Note that if friends or family contribute to your account, those contributions are considered gifts from you, for federal gift tax purposes.
Are gift contributions made by friends and family members eligible for a Connecticut income tax deduction?
Yes, if your friend or family member is a Connecticut taxpayer they may be eligible for a Connecticut income tax deduction when they make contributions to your account. Connecticut taxpayers may deduct from their Connecticut adjusted gross income contributions made to one or more accounts in CHET during the tax year up to certain maximum amounts whether or not the contributor is the owner of the account. The annual contribution deduction limits are as follows: (1) $5,000 for an individual who is single, head of household, or married/civil union filing separately; and (2) $10,000 for an individual who is married/civil union filing jointly, or qualifying widow(er) with dependent child. The annual contribution deduction limit is not a per beneficiary limit but rather is an overall limit on how much of the taxpayer’s contributions to all accounts in CHET are deductible for the year. Connecticut taxpayers may not claim a deduction for a rollover into an account in CHET from another qualified 529 plan or from a Coverdell education savings account. See the Disclosure Booklet. Recapture provisions may apply.
Will I receive a confirmation of a gift contribution submitted to my CHET account?
Yes. Account owners receive a confirmation statement for contributions made via check or one-time online contributions (not via an Automatic Contribution Plan or payroll deduction).
Will I receive a confirmation if an account is established, or future contributions made, for my beneficiary by someone else?
No. Only the account owner will receive a confirmation statement when an account is established and funds are contributed. If a friend or family member opens an account for your child, they will need to inform you or the child about the account, and any contributions they make.
For Gift Givers
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How do I gift a CHET account or contribute to an existing account?
Friends and family can help a child or loved one pay for the rising costs of college by opening a new CHET account as a gift or making a gift contribution** to an existing account. Go to How to Give for information on opening a new account or contributing to an existing account.
Is there a minimum amount for gifting?
Yes, as with regular contributions, the minimum amount friends and family members may contribute (gift) to an existing account is $25. New accounts can be opened with as little as $25 ($15 if your employer offers payroll deduction.) Contributions are permitted by personal checks (excluding starter checks, credit card convenience checks and counter checks), bank drafts, teller’s checks, money orders, and checks issued by a financial institution payable to the account owner and endorsed over to the Program, and third-party personal checks up to $10,000. Checks must be drawn on a U.S. banking institution and must be payable in U.S. dollars.
Can I open a new CHET account as a gift?
Yes. Anyone with a Social Security Number (SSN) or federal Taxpayer Identification Number can open an account with as little as $25 ($15 if your employer offers payroll deduction.) You will need to know the SSN or federal Taxpayer Identification Number of the person you will designate as the beneficiary before you can finalize the enrollment process. You can symbolize your gift by downloading a Gift of Education Certificate and presenting it to the beneficiary.
Can I make changes to an existing CHET account?
No. The account owner has complete control of an existing account. You can only contribute to an existing account. Only account owners can access the account and perform other transactions.
Why is it important to reference a CHET account number* when I gift to an existing account?
In order to process the gift contribution** and apply the contribution to the correct CHET account, it is important that you clearly indicate the account number* of the CHET account in which you want the gift contribution to be made. You can get this information from the account owner.
How are gift contributions invested?
Contributions to a CHET account are invested according to the investment allocation the account owner has established for the account. Friends and family members can only contribute to the account. Only account owners can access the account and make changes to the investment allocation.
Will I receive a confirmation of my gift contribution to an existing CHET account?
No. Ask the account owner to confirm that your contribution was received or noted on their statement. Be sure to make a copy of the Gift of Education Certificate along with a copy of the check and keep it for your records. (If you plan to deduct the contribution on your Connecticut income tax deduction, your copies will help serve as confirmation of your contribution to CHET. Account owners do receive written confirmations for contributions made using checks or one-time online contributions (not via an Automatic Contribution Plan or payroll deduction).
Will I receive a confirmation when I open a new CHET account as a gift?
Yes. If you open an account online you will receive an online confirmation as well as a confirmation statement in the mail. If you mail in your enrollment application, you will receive a confirmation in the mail.
Are gift contributions to an existing or new CHET account eligible for a Connecticut income tax deduction?
If you are a Connecticut taxpayer, you may be eligible for a Connecticut income tax deduction when you make contributions to an existing account or open and contribute to a new account. Connecticut taxpayers may deduct from their Connecticut adjusted gross income contributions made to one or more accounts in the CHET Program during the tax year up to certain maximum amounts whether or not the contributor is the owner of the account. The annual contribution deduction limits are as follows: (1) $5,000 for an individual who is single, head of household, or married/civil union filing separately; and (2) $10,000 for an individual who is married/civil union filing jointly, or qualifying widow(er) with dependent child. The annual contribution deduction limit is not a per beneficiary limit but rather is an overall limit on how much of the taxpayer’s contributions to all accounts in CHET are deductible for the year. Connecticut taxpayers may not claim a deduction for a rollover into an account in CHET from another qualified 529 plan or from a Coverdell education savings account. See the Disclosure Booklet. Recapture provisions may apply.
How does the account owner know that I sent a gift?
Symbolize your gift by downloading and presenting a CHET plan gift certificate, fill it out, and present it to the child or loved one. Wrap it, frame it or place it in a card. It’s a great way to symbolize your gift.
*The Account Number can be found on the account owners' statement and is comprised of the four (4) digit number preceding the dash (investment portfolio) and the set of numbers to the right (account number).
** The minimum contribution amount to a CHET account is $25. Contributions are permitted by personal checks (excluding starter checks, credit card convenience checks and counter checks), bank drafts, teller’s checks, money orders and checks issued by a financial institution payable to the account owner and endorsed over to the Plan, and third-party personal checks up to $10,000. Checks must be drawn on a banking institution located in the U.S. and must be payable in U.S. dollars.
