Proposed GOP tax bill includes provisions affecting education savings
The Tax Cuts and Jobs Act bill introduced by House Republicans on November 2nd includes a few provisions that could directly affect college savers. The bill proposes to eliminate Coverdell Education Savings Accounts (ESAs) and end all contributions to these accounts after 2017. The provision allows for tax-free rollovers of existing Coverdell ESAs into 529 plans. Another provision expands the list of qualified expenses allowed for 529 plans to include $10,000 per year of private elementary or high school expenses, as well as costs of apprenticeship programs. For more information, click here
Senate Finance Committee Approves 529 legislation
The Senate Finance Committee has approved 529 legislation authored by Senator Charles Grassley (R-IA), S. 335. The bill contains provisions to allow computer technology and equipment expenses to be included as qualified expenses for 529 purposes, to eliminate the distribution aggregation requirement for 529 tax reporting purposes, and to allow a tax-free recontribution of funds to a 529 plan should the student withdraw from an educational institution. The next step for the bill is to be brought to the Senate floor for consideration.