Kickstart your Bright Start 529 College Savings with Illinois First Steps
Published February 11, 2026
Last Modified Date February 11, 2026
Starting early is one of the smartest moves you can make when it comes to saving for your child’s future education. College costs have risen over 90% over the last 20 years, but eligible Illinois families have an option that can help jumpstart savings: Illinois First Steps.1
Illinois First Steps provides the option to claim a free, one-time $50 seed deposit to Bright Start 529 college savings account owners for a child born or adopted on or after January 1, 2023 to Illinois residents. It’s a simple, effective way to begin contributing to a tax-advantaged education fund and claiming the $50 seed deposit takes only a few minutes during account setup.
Understanding Illinois First Steps and Eligibility
Illinois First Steps was launched in 2023 to help parents and legal guardians begin saving as early as possible. Here’s what you need to know about eligibility:
- Residency: The parent or legal guardian must be an Illinois resident at the time of the child’s birth or adoption and time of claim submission.
- New child requirement: The child must be born or adopted on or after January 1, 2023.
- Account ownership: A parent or legal guardian must open the Bright Start 529 account and list the child as the beneficiary.
- Claim by age 10: Parents or legal guardians must claim the $50 seed deposit from Illinois First Steps before the child's 10th birthday.
Opening an Account and Claiming Your Seed Deposit
Opening an account is quick and simple. You can complete enrollment online or through the READYSAVE™ 529 app. During enrollment, you’ll:
- Provide account information – including details about the account owner (parent or legal guardian), the beneficiary (eligible child), and an optional successor owner.
- Designate your child as the beneficiary – making them eligible to receive the Illinois First Steps deposit.
- Claim the deposit – fill out the simple claim form included in the enrollment process.
If the claim is verified, the seed deposit will be made the following quarter. These funds will be held in an omnibus account owned and administered by the Illinois State Treasurer, but viewable in your Bright Start 529 Account.
Early Contributions
Claiming the $50 seed deposit is just the start. You too can contribute to the account. The earlier you save, the more potential your account has to grow through the power of compounding. Even small, regular contributions can grow significantly over 18 years. For example, contributing $100 per month from birth after a $100 initial contribution could grow to more than $40,000 by college age, assuming a modest 6% average annual return.
Note: This assumes a $100 lump sum investment, a $100 monthly investment and 6% annual rate of return. The example does not include the impact of any investment fees, expenses or taxes that would be associated with an actual investment. If such costs had been taken into account, the results shown would have been different. It also does not factor in market volatility.
Later Contributions
If you don’t start right away, don’t worry—you can still benefit. Bright Start 529 offers flexible contribution options so you can add lump sums, set up automatic transfers, or invite family and friends to contribute through Ugift®, a gifting tool. Take advantage of the Bright Start 529 College Savings Plan Calculator to see how your savings can add up.
Start Your College Savings Journey Today
The sooner you begin, the more prepared you’ll be to cover future education costs—whether that’s college, technical training, or an apprenticeship program. Jumpstart your child’s college fund now with the Illinois First Steps $50 seed deposit. Your early contributions can make a lasting difference.
Withdrawals for registered apprenticeship programs and student loans can be withdrawn free from federal and Illinois income tax. If you are not an Illinois taxpayer, these withdrawals may include recapture of tax deduction, state income tax as well as penalties. You should talk to a qualified professional about how tax provisions affect your circumstances. Apprenticeship programs must be registered and certified with the Secretary of Labor under the National Apprenticeship Act. Student loan repayment subject to a lifetime limit of $10,000 per individual when using a 529 plan.
Frequently Asked Questions (FAQs)
Q: How long does it take for the $50 seed deposit to appear in my account?
A: Once a parent submits a claim for the seed deposit, the information will be verified against Illinois birth and/or tax records from the Illinois Department of Public Health and Illinois Department of Revenue. If the claim is verified, the seed deposit will be made the following quarter. The funds will be held in an omnibus account owned and administered by the Illinois State Treasurer.
Q: What if my child was born or adopted in 2023, but I didn't open the account right away?
A: That's okay! As long as your child was born or adopted on or after January 1, 2023, you can claim the $50 seed deposit any time before their 10th birthday.
Q: What happens to the Illinois First Steps seed deposit and parent contributions made to the 529 account if my child decides not to go to college?
A: The options differ significantly between the Illinois First Steps seed deposit and your personal contributions.
Parent Contributions: You have flexible options for the money you contributed:
- Student Loan Repayment. Your 529 can be used for student loan repayment up to a $10,000 lifetime limit per individual.2
- Pay for K-12 qualified expenses. Up to $20,000 annually can be used toward K-12 tuition (per student).2
- Change the beneficiary. You can transfer the funds to another eligible beneficiary, such as another child, a grandchild or yourself.
- Withdrawal. If you just want the money back, you can withdraw the funds at any time. If funds are withdrawn for a purpose other than qualified higher education expenses, the earnings portion of the withdrawal is subject to federal and state taxes plus a 10% additional federal tax on earnings (known as the "Additional Tax"). See the Plan Description for more information and exceptions.
- Roll over funds to a Roth IRA. Subject to specific rules and limitations, you may be eligible to roll over the funds into a Roth IRA for the original beneficiary child. Funds rolled over to a Roth IRA can be withdrawn free from federal taxes and Illinois income tax. If you are not an Illinois taxpayer, these withdrawals may include recapture of tax deduction and state income tax. Account Owners and Beneficiaries should consult with a qualified tax professional before rolling over funds from their 529 plan to contribute to a Roth IRA.
- Wait. You can always wait because the funds never expire, and often the choice to go to school is a delayed decision. So if your child changes their mind down the road, your savings will still be available.
Illinois First Steps $50 Seed Deposit:
- This initial deposit is locked to the original eligible child and cannot be transferred to another person.
- Seed funds and any interest earned will be considered forfeited if they are unclaimed by the beneficiary's 10th birthday or unused for qualified expenses by the beneficiary's 26th birthday.
