Illinois First Steps:
$50 to Help You Start Saving for College

Illinois First Steps is a program established in 2023, designed to jump-start college savings for new parents or legal guardians of an eligible child. The key features include the following:

• The State of Illinois will provide a seed deposit of $50 for an eligible child, born or adopted on or after January 1, 2023, to a parent or legal guardian who is a resident of Illinois at the time of birth or adoption and time of claim submission.
• Only one Illinois First Steps $50 seed deposit may be claimed per eligible child.
• The parent or legal guardian of the eligible child must claim the one-time $50 seed deposit before the child’s 10th birthday.
• Illinois First Steps is administered by the Office of the Illinois State Treasurer and was established by the Illinois General Assembly to help Illinois families start saving for the rising costs of higher education and training.

A 529 college savings plan is a state-sponsored, tax-advantaged investment plan that enables you to save money for a beneficiary’s future education expenses. Funds can be used to cover a wide range of qualified higher education expenses at eligible universities, community colleges, trade schools and apprenticeships nationwide, as well as at some foreign institutions.

The Illinois 529 college savings plans are Bright Start 529 (for individuals who manage their own account) and Bright Directions 529 (for account owners who work with a financial advisor).

The State of Illinois will provide a one-time seed deposit of $50 for every eligible child, born or adopted on or after January 1, 2023, to a parent or legal guardian who is an Illinois resident at the time of birth or adoption and time of claim submission.

Children born to Illinois resident parents who give birth to a child outside Illinois (such as a family residing in Metro East who gives birth at a hospital in Saint Louis, Missouri) will be eligible for the program.

Only one Illinois First Steps $50 seed deposit may be claimed per eligible child.

The parent or legal guardian of the eligible child would follow these simple steps:

1. Open a Bright Start 529 account. If you work with a financial advisor, they can assist you with opening an account and the claim process using the Bright Directions Advisor-Guided 529 College Savings Plan.
2. Name the eligible child as beneficiary of the account.
3. Claim your child's $50 seed deposit during the 529 account enrollment process.
4. Submit the claim. Illinois First Steps will then review and verify the information submitted on the claim.

Bright Start 529 and Bright Directions 529 are both Illinois-sponsored 529 college savings plans.

A Bright Start 529 account can be opened by individual investors.

A Bright Directions 529 account can only be opened through a financial advisor.

Both Bright Start 529 and Bright Directions 529 offer low cost, high-quality investment options and both enjoy attractive Illinois and federal income tax benefits.

Once a parent or legal guardian submits a claim for the seed deposit, the information will be verified against birth records and information 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.

Absolutely. Illinois First Steps is designed as a pledge to help you get started. After the one-time $50 seed deposit, the rest of your college savings contributions to your Bright Start 529 or Bright Directions 529 account are up to you.

You can make contributions at any time or set up an automatic investing plan for recurring deposits. You can also invite family and friends to make gift contributions to your Bright Start 529 or Bright Directions 529 account.

Congratulations on planning ahead! You may open a Bright Start 529 account or Bright Directions 529 account before the baby is born to start saving but you cannot not claim the Illinois First Steps $50 seed deposit until the child is born and meets all eligibility criteria.

Once the beneficiary completes high school or reaches the age of 18, the funds can be used for qualified higher education expenses as defined by Illinois law (does not include K-12 expenses).¹

To use the Illinois First Steps funds, the beneficiary must be a resident of Illinois. The funds can be used at eligible universities, colleges, trade schools, and apprenticeship programs anywhere in the United States and at some institutions abroad. Parent contributions have no residency limitations.

Footnotes

1. ¹If the funds aren't used for qualified higher education expenses, a federal 10% penalty tax on earnings (as well as federal and state income taxes) may apply.↩

You can open a Bright Start 529 account (or Bright Directions 529 account if you work with a financial advisor) and start saving. Account owners must be age 18+ with a U.S. address and a Social Security Number or Individual Taxpayer Identification Number. Both plans offer tax advantages for Illinois residents, respected fund families, competitive costs, and no minimum or monthly required contributions.

Bright Start 529 account owners who meet the Illinois First Steps eligibility requirements can claim the one-time $50 seed deposit for their new child by logging in to the account and looking under the left menu options for "Submit Illinois First Steps Claim."

Bright Directions 529 account owners who meet the Illinois First Steps eligibility requirements can claim the $50 seed deposit for their new child by visiting Bright Directions.com/first-steps to submit a claim or by contacting their financial advisor to assist with the claim process.

Grandparents, other relatives, and friends are not eligible to submit a claim for the child unless they are a legal guardian. Only the parent or legal guardian of the eligible child can claim the Illinois First Steps $50 seed deposit.

There are no household income limits to claim the seed deposit. To qualify for the one-time $50 seed deposit from Illinois First Steps, you and your child must meet all eligibility criteria.