CSPN recommends 529 leeway for Katrina victims

The College Savings Plans Network (CSPN) yesterday submitted a list of proposals to the administration and Congress that would provide victims of Hurricane Katrina tax relief. These proposals would allow either account owners or designated beneficiaries of 529 plans whose primary residence was in the geographic area directly affected by Hurricane Katrina to withdraw funds from their 529 plan to cover expenses incurred in response to Hurricane Katrina as if the distribution were used for qualified higher-education expenses, and would waive the penalty on distributions that are not used for qualified higher-education expenses for all taxpayers who took a distribution from their 529 plan prior to Hurricane Katrina in order to pay for qualified higher-education expenses at an eligible educational institution in a geographic area affected by Hurricane Katrina, and who find that their designated beneficiaries are either not able to attend, or can attend only on a reduced basis, their intended eligible educational institution.
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