The new tax law signed in December made an important modification to 529 college savings plans. And it’s a huge change!
These funds can now be used for qualified K-12 educational expenses. This can be a great thing for parents who believe their children can receive a better education in a non-public school setting.
Up to now, 529 plans (savings vehicles which enable tax-free growth) have been strictly for qualified college-related expenses.
With the new law, state-sponsored 529 plans can be used for “tuition in connection with enrollment or attendance at an elementary or secondary public, private, or religious elementary or secondary school.”
There is a small catch. The maximum expenditures for K-12 monies for any 529 beneficiaries are limited to $10,000 a year per student.
Qualified college expenses paid from a 529 Plan normally have no annual distribution limit.
If you ever needed more reasons to max out the funding on your children’s 529 Plans – this is it.
If you need help determining the optimum amounts to contribute, be sure to contact us for help.
He is also a founding Board Member and Finance Director of the Fayette Pregnancy Resource Center and serves on the Board of the National Equal Rights Institute.