Illinois removes its tax penalty on non-IL 529 plans
The Illinois Governor has signed HB 376 into law, removing the state tax on qualified distributions received by an Illinois taxpayer from a non-Illinois 529 plan.
The measure was passed by the Illinois General Assembly back in May.
The removal of the back-end penalty for using an out-of-state 529 plan is effective for 2007 and later years.
The new law requires that out-of-state 529 plans make it known to Illinois residents and to financial advisers selling the plans that an Illinois 529 plan offers a state tax deduction benefit not available with out-of-state plans.
Illinois law also now requires the recapture of claimed deductions if assets are rolled over from an Illinois 529 plan to an out-of-state 529 plan.
Return to 529 News centerThe measure was passed by the Illinois General Assembly back in May.
The removal of the back-end penalty for using an out-of-state 529 plan is effective for 2007 and later years.
The new law requires that out-of-state 529 plans make it known to Illinois residents and to financial advisers selling the plans that an Illinois 529 plan offers a state tax deduction benefit not available with out-of-state plans.
Illinois law also now requires the recapture of claimed deductions if assets are rolled over from an Illinois 529 plan to an out-of-state 529 plan.