IRS approves new refund formula for I-529 Plan
In letter ruling 200621033, IRS grants approval for a proposed change in the method used by the Independent 529 Plan to calculate refunds from the program. Currently, a refund of contributions is adjusted for the actual investment return of the program trust fund, limited to plus or minus 2% annualized. Independent 529 Plan had submitted a request in 2004 for IRS approval of a change whereby the limits are based on the yield of five-year Treasury notes as determined on a quarterly basis. Assuming Treasury note yields exceed 2% on an annualized basis, this change will allow a larger positive or negative adjustment to the refund if, for example, the beneficiary attends a non-participating college.
At this time, Independent 529 Plan has not implemented this change nor has it indicated whether it intends to implement it.
Return to 529 News centerAt this time, Independent 529 Plan has not implemented this change nor has it indicated whether it intends to implement it.