WASHINGTON STATE COVID-19 VACCINE APPRECIATION PROMOTION
Q: What is GET?
A: The Guaranteed Education Tuition (GET) Program is Washington’s 529 prepaid college tuition program. It opened in 1998 to help families save for their students’ future higher education costs through the purchase of tuition units. As a 529 plan, GET offers federal tax benefits through section 529 of the Internal Revenue Code. More information is available at wastate529.wa.gov.
Q: What is a GET unit?
A: A GET tuition unit represents a portion of in state-tuition. The state of Washington guarantees that 100 GET tuition units bought today will equal one year of resident, undergraduate tuition and state-mandated fees at Washington’s most expensive public university whenever they are used in the future. Basically, the plan allows families to buy tuition units at a set price today with the guarantee that the units will keep pace with future in-state tuition costs.
Q: Will winners be taxed on the 100 GET units awarded through ‘Shot of a Lifetime’?
A: It is anticipated that the 30 winners of the 100 unit GET prize packages will not pay federal or state taxes for the 2021 tax year. For federal tax purposes, the prize should be considered a scholarship under Section 117 of the Internal Revenue Code and therefore, exempt from federal tax. Section 117 requires that the scholarship be used only for tuition, fees, books, supplies, and equipment. Therefore, GET requires any distribution from the account to be made directly to the winner’s school to pay tuition and fees. Families should consult with a qualified tax advisor when deciding to accept the GET prize units and when it is time for the student to use the GET units for school. In addition, please consult IRS Publication 970 for further information.
Q: How does my child claim the prize if they win GET units?
A: After each of the prize drawings on June 15 and 22, the Washington Lottery will contact each presumptive GET unit winner to review the details of what they have won. The presumptive winner must agree to the terms and conditions of the ‘Shot of a Lifetime’ promotion. The presumptive winner will also be advised that the award of the prize is contingent upon the winner’s agreement and compliance with GET program rules, including the terms and conditions of the GET Master Agreement. The Washington Lottery will then provide GET with a list of all winners who have accepted the prize and GET will reach out to each winner. The GET representative will walk the family through the process of setting up a GET account, review the program rules, and will collect important information about the winner, as required by applicable rules.
Q: Will the winners ‘own’ the GET units?
A: The state will own the GET account for the benefit of the winner. GET may develop additional criteria and restrictions necessary to ensure these unit awards remain scholarships.
Q: How can the prize winners use GET units when they need to pay for college costs?
A: The GET program will provide more information to families about how to use their GET units to pay for school when it is time for the student to enroll in school. Because these GET units are being awarded as scholarships, GET will require certain steps to ensure that the funds are being sent directly to the student’s school for allowable expenses. If the funds are not used for allowable expenses, a student and their families could face negative federal tax consequences.
Q: What can I use GET units for?
A: Because GET is a 529 plan, generally GET units can be redeemed for various higher education costs, including tuition, fees, books, and room and board. However, the ‘Shot of a Lifetime’ GET unit prize packages are being awarded as scholarships. For scholarship purposes, the IRS considers only tuition, fees, books, supplies, and equipment ‘qualified education expenses.’ Room and board expenses are not considered ‘qualified education expenses’ for scholarship purposes. Therefore, if scholarship GET units awarded under this promotion are used for expenses other than tuition, fees, books, supplies, and equipment, the student and their family could face negative federal tax consequences in the year the GET units are used (please see IRS Publication 970).
Q: Where can I use GET units?
A: GET units can be used at public and private colleges, universities, community colleges, and technical and trade schools in Washington and across the country. In order for the GET units awarded under this promotion to remain eligible as scholarships, the school must be eligible for scholarship purposes under Section 117 of the Internal Revenue Code (see IRS Publication 970, Chapter 1).
Q: When can I use GET units?
A: GET units are subject to a 2-year wait period after purchase, during which time they cannot be used. You will not be able to access your GET units until after July 1, 2023 or once you have reached your benefit use year (whichever is later) and you provide GET with proof of enrollment at an eligible school.
Q: What should I know about owning GET units?
A: GET is responsible only for delivery of the prize; not responsible for prize utility or otherwise. The scholarship does not take into account your personal circumstances or other factors that may be important in making investment decisions. The State of Washington offers a full faith and credit guarantee of the units in your GET account. However, you should consult your tax advisor about the tax implications, if any, associated with acceptance of the GET unit scholarship and contributions and/or withdrawals from your GET account. The prize may be considered income, and any and all taxes associated with a prize are your responsibility. The promotion is not a recommendation to own GET units.