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IMPORTANT NOTICE: The Texas Tuition Promise Fund is established and maintained by the Texas Prepaid Higher Education Tuition Board. The Texas Sunset Advisory Commission performs periodic reviews of most state agencies. The Commission is currently reviewing the mission and performance of the Board. For information on how to provide comments or suggestions to Sunset staff on the Board’s mission, operations or services, please click here.

Gifting


Give the Texas Tuition Promise Fund as a Gift

Not just parents, but grandparents, aunts, uncles and even friends can open a new contract or add to an existing account established by someone else.

Suggest a Contribution as a Gift

A contribution to your child’s Texas Tuition Promise Fund account is a wonderful suggestion when friends and family inquire about gift ideas for birthdays, holidays and other special occasions.

Contributing to your child’s college fund is a special gift that can help them prepare for college. And though the family will help you save, you will control how the money is spent.

Anyone Can Contribute to Your Contract

Anyone can help you purchase Tuition Units,Tuition Units
Tuition Units are the unit of measure used to purchase prepaid tuition. Generally, one unit represents one percent of the cost of tuition and required fees for 30 semester hours at the school that most closely matches the unit’s pricing structure.
including relatives, friends, or even your next door neighbor.

Please note, however, that the PurchaserPurchaser
The person who establishes the Contract for a specified Beneficiary. There can only be one Purchaser for each Contract. The Purchaser is responsible for making payments in a timely manner and is the only person who may direct or receive refunds, or may direct rollovers, Contract changes, and changes in the designated Beneficiary except that the Contract may be cancelled or modified by the Plan. Friends and family who contribute to another person’s account are not the Purchaser and may not prevent, direct or receive refunds, and may not direct rollovers, contract changes, or changes in the designated Beneficiary.
will retain control over all contributions to the account (except for any state-funded contributions). Contributions may have gift or other tax consequences.

Gift Tax and Estate Tax Benefits

Family and friends can each purchase Tuition UnitsTuition Units
Tuition Units are the unit of measure used to purchase prepaid tuition. Generally, one unit represents one percent of the cost of tuition and required fees for 30 semester hours at the school that most closely matches the unit’s pricing structure.
up to $15,000$15,000
Contributions are “completed gifts” for gift tax purposes and qualify for the $15,000 annual exclusion per Beneficiary.
per Beneficiary each year or up to $75,000$75,000
If the Account Owner dies before the first day of the fifth calendar year, the portion of the prorated contributions allocable to calendar years following the year of death (except for earnings on such investment) would be includible in the estate of the Account Owner for federal estate tax purposes. More information can be found in the Plan Description. Purchasers should consult with a qualified tax advisor.
at once (using a special five-year proration period and assuming no other gifts have been made to the Beneficiary), without incurring a federal gift tax. To effect the five-year election, the contributor must file an IRS Form 709. If the contributor dies before the end of the five-year period, the applicable portion would be included in the contributor’s gross estate for federal estate tax purposes.

Purchases are generally treated as completed gifts, and qualify for the “annual exclusion” for federal gift tax purposes.

In addition, amounts contributed to purchase Tuition UnitsTuition Units
Tuition Units are the unit of measure used to purchase prepaid tuition. Generally, one unit represents one percent of the cost of tuition and required fees for 30 semester hours at the school that most closely matches the unit’s pricing structure.
on behalf of a Beneficiary are generally excluded from a donor’s estate for federal estate tax purposes. Please check with your tax advisor for more information.

If establishing a new account, residencyresidency
means domicile within the State of Texas at the time the Purchaser enters into a Contract.
requirements apply to the Beneficiary. If the Beneficiary is not a Texas resident, then the Purchaser must be a Texas resident and the parent or guardian of the Beneficiary. Non-Purchasers or individuals designated as Successor Purchasers have no control over the Contract. Only the Purchaser (owner of the Contract) may direct transfers, rollovers, withdrawals, and changes in the Beneficiary.