529 College Choice Plans

You may be aware of this change with 529 College Choice plans. If not, I wanted to inform you that Indiana residents can now create 529 accounts and use them to pay for private school tuition for K-12 students and then receive credit back when they file taxes. Previously these tax credits were only available for college students. Below is an excerpt I received from our Edward Jones representative after I asked about the new 529 plans. We are planning to create an account for _____ so we can receive some tax credit and maybe some other FCA families would like to take advantage of this as well.

I spoke with College Choice and they have confirmed that IN has passed this bill for K-12 elementary, secondary public, private or religious schools tax credit. The maximum contribution is $10,000 per sgle or jt tax return but you can only get a $500 max tax credit which is 10% in 2018 but in 2019 you will be able to recover the 20%, $1000 max like you can now in a regular 529 for college. The $700 you have already spent in May should be considered a 2018 qualified expense if it was for tuition only. Please note that this is TUITION ONLY. It isn’t like the college 529 that you can get reimbursed for other things like, room and board, books, computer, ect. Uniforms are NOT a qualified expense either. I would reach out to your tax advisor and call College Choice @ 1-866-485-9413 with specific questions. Also, make sure you keep detailed receipts for your tax preparer of what you paid towards this tuition so there isn’t any questions later that it was or wasn’t a qualified K-12 expense.

If you have questions please call College Choice at 1-866-485-9413 and they are very gracious and will answer your questions. They confirmed the above information as correct. If there is an existing 529 account you will need to designate any new contributions as to whether for K-12 or college. It appears the registration and book fee is NOT covered by this plan, but tuition is.

As always, with anything relating to taxes, consult your tax professional for further clarification.