Can I cash in a ee treasury bond and put all of it into 529 plan?

[maryanne25]

I have a michigan 529 plan set up for my grandson can I cash in a ee bond and put into plan and use it as a gift tax exemption

[SabrinaD2]

Yes, you can  likely cash in a Series EE Treasury bond and deposit the proceeds into a 529 plan. This can be done without paying federal tax on the bond's interest if the funds are used for qualified education expenses.

• Regarding gift tax exemption, contributions to a 529 plan are considered gifts and are subject to federal gift tax rules. 
  • However, you can use the annual gift tax exclusion amount ($18,000 per recipient in 2024) or spread larger contributions over five years to avoid gift tax.

For more detailed information, you can refer to:

• Saving for College: How to Roll Over U.S. Savings Bonds Into a 529 Plan
• Legal Clarity: Michigan 529 Plan Rules, Tax Benefits, and Financial Aid Impact