On December 22, 2017, the president signed H.R. 1, the federal tax reform bill, into law. The law permits withdrawals from a 529 college savings account up to $10,000 per year per student for tuition expenses in connection with enrollment and attendance at an elementary or secondary public, private or religious school (“K-12 tuition”). We are working on updating our website to reflect the new U.S. tax law. In the meantime, please note the following:
Indiana taxpayers should consult their tax advisors before making a withdrawal for K-12 tuition and/or before making a contribution which they intend to ultimately withdraw for K-12 tuition. It may require action by the Indiana General Assembly to extend favorable Indiana state tax treatment to withdrawals for K-12 tuition taken from a CollegeChoice Advisor Savings Plan account. Additionally, if a distribution is not considered qualified for state tax purposes, it would trigger a recapture of previous state tax credits claimed under Indiana tax law.
Account owners can withdraw assets to pay K-12 tuition and treat the withdrawals as qualified expenses for federal tax law purposes.
Account owners can roll over funds in 529 Plan accounts to ABLE Plan accounts without federal tax consequences, up to the annual $15,000 contribution limit. However, a rollover could currently trigger a recapture of previous state tax credits claimed under Indiana tax law. It may require action by the Indiana General Assembly to extend favorable Indiana state tax treatment to rollovers from a CollegeChoice Advisor Savings Plan account to an ABLE Plan account.
We will provide more information as additional details about the effects of the new federal tax law on Indiana state tax law become clear. In the meantime, we encourage you to consult a qualified tax advisor about your personal circumstances.
For more information about the CollegeChoice Advisor 529 Savings Plan ("CollegeChoice Advisor"), contact your financial advisor, call 1.866.485.9413, click here to obtain a Disclosure Statement, which includes investment objectives, risks, charges, expenses, and other important information; read and consider it carefully before investing. Ascensus Broker Dealer Services, Inc. ("ABD") is Distributor of CollegeChoice Advisor.
Please Note: Before you invest, consider whether your or the beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in that state’s qualified tuition program. You also should consult a financial, tax, or other advisor to learn more about how state-based benefits (or any limitations) would apply to your specific circumstances. You also may wish to contact directly your home state’s 529 plan(s), or any other 529 plan, to learn more about those plan’s features, benefits and limitations. Keep in mind that state-based benefits should be one of many appropriately weighted factors to be considered when making an investment decision.
CollegeChoice Advisor is administered by the Indiana Education Savings Authority ("Authority"). ABD, the Program Manager, and its affiliates, have overall responsibility for the day-to-day operations, including investment advisory, recordkeeping and administrative services, and marketing. CollegeChoice Advisor's Portfolios invest in: (i) exchange-traded funds; (ii) mutual funds; or (iii) an FDIC-insured omnibus savings account held in trust by the Authority at Sallie Mae Bank. Except for the Savings Portfolio, investments in CollegeChoice Advisor are not insured by the FDIC. Units of the Portfolios are municipal securities and the value of the units will vary with market conditions.
Investment returns will vary depending upon the performance of the Portfolios you choose. Except to the extent of FDIC insurance available for the Savings Portfolio, depending on market conditions, you could lose all or a portion of your money by investing in CollegeChoice Advisor. Account Owners assume all investment risks as well as responsibility for any federal and state tax consequences.
Not FDIC-Insured (except for the Savings Portfolio). No Bank, State or Federal Guarantee. May Lose Value.