The legislation includes a provision that expands 529 allowable higher education expenses to include K-12 tuition as a qualified expense (up to $10,000 per beneficiary per year across all accounts). It also permits rollovers from 529 plans to ABLE plans for the same beneficiary or a qualified family member.
As of January 1, 2018, qualified higher education expenses will include distributions from your account up to $10,000 per year, per beneficiary across all accounts to be used for tuition expenses for enrollment or attendance at a K-12 public, private, or religious school. State tax treatment may vary.
The only change is being able to use the account for K-12 tuition. There is no change to provisions covering higher education. The Plan Disclosure Document has been supplemented with updated information. We are in the process of incorporating the new provisions into other plan materials.
You can request a distribution over the phone by calling 1-800-478-0003, or you can complete a Distribution Form and submit it by mail. Additionally, you may request distributions online (except from the ACT Portfolio) by logging into your account. Please allow up to two weeks for processing and mail time. Distribution checks for K-12 must be made payable to the account holder or the beneficiary, not the K-12 institution. If you are not an Alaska resident, you should discuss your state's tax treatment of K-12 distributions with a qualified tax advisor.
It is the account holder's responsibility to keep all receipts/records of all educational expenses and furnish them to the IRS in the event of an audit.
Yes. There is no direct impact on the state of Alaska's Permanent Fund Dividend (PFD) and how it is to be used. Any contributions to the UA College Savings Plan are eligible for use for qualified higher education expenses, including K-12 tuition, as defined in the new tax reform measure.
While qualified distributions for K- 12 tuition expenses are federal tax-free, families may have to pay state income tax depending on their state of residence. Consult your tax professional for more information.
The current distribution options are still in effect, although for K-12 distributions, we will only be able to provide distributions directly to the account holder or the beneficiary and not to the K-12 institution.