The Tax Cuts and Jobs Act (TCJA), which was recently enacted by Congress, expands permissible uses for 529 plans for education. 529 plans, which allow cash contributions to a tax-advantaged investment account, permit individuals to withdraw contributions and earnings for qualified education expenses.
Historically, withdrawals have been limited to postsecondary education expenses. Under TCJA, the definition of qualified expenses has been expanded to include primary and secondary school expenses. This means that certain public, private, or religious K-12 tuition costs, up to $10,000 per child, per year, can be withdrawn from 529 accounts and treated as qualified expenses with respect to federal and state tax benefits.
The changes under TCJA also permit rollover amounts from 529 accounts to ABLE accounts up to the ABLE annual contribution limit, providing flexibility in planning for parents of children with disabilities.
Please contact Leech Tishman’s Estates & Trusts Practice Group for more information on education funding and planning strategies.
Leech Tishman’s Estates & Trusts Practice Group is engaged in the development of practical, effective estate planning and business succession planning for individuals, families, businesses, non-profit organizations, and private foundations.
If you have any questions regarding estate and trust matters, please contact Stefanie L. Pate, a Partner in Leech Tishman’s Pittsburgh, PA office. Stefanie can be reached at 412.261.1600 or email@example.com. Melanie Cuddyre, Estates & Trusts Associate, assisted in the preparation of this article. She can be reached at 412.261.1600 or firstname.lastname@example.org.
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Leech Tishman Fuscaldo & Lampl is a full-service law firm dedicated to assisting individuals, businesses, and institutions. Leech Tishman offers legal services in alternative dispute resolution, aviation & aerospace, bankruptcy & creditors’ rights, construction, corporate, employee benefits, employment, energy, environmental, estates & trusts, family law, government relations, immigration, insurance coverage & corporate risk mitigation, intellectual property, internal investigations, international legal matters, litigation, real estate, and taxation. Headquartered in Pittsburgh, PA, Leech Tishman also has offices in Chicago, Lakewood Ranch, FL, Los Angeles, New York and Wilmington, DE.