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Section 529 Accounts Are Now Available for Private School Tuition – Part Two

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As we previously reported, under the new tax law Section 529 College Savings Account plans are now available for elementary and secondary school tuition. Now let’s take a look at what that means at the state level.

Because 529 accounts are defined in the Internal Revenue Code, it is not automatic or required that the states recognize changes made at the federal level. States that have adopted rules that explicitly limit the use of 529 account funds to “college” expenses will need to act before the funds can be used for K-12 tuition and preserve any favorable state treatment.

Under current laws, the residents of most states cannot yet take advantage of the federal rule change without some consideration to state-level limitations. Savingforcollege.com has a table outlining the options available in each state.

Ted Batson

Ted serves as partner, tax counsel, and Professional Practice Leader – Tax. As a certified public accountant and tax counsel, Ted advises exempt organizations of all sizes on a wide range of issues. This includes consulting on tax and employee benefit related matters, representation before state and federal tax authorities, and assistance with firm audit or advisory engagements to formulate advice and counsel on important operating and tax issues. Ted also leads the firm’s tax preparation practice, including IRS Forms 990 and 990-T and related state forms.

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