Investment Change and 529 Tax Law Changes

Investment Change and 529 Tax Law Changes

Here are several important Plan updates:

  1. Investment Option to be Replaced (read more)
    On February 6, 2018, the Cohen & Steers Dividend Value Fund will be replaced in the CollegeCounts 529 Fund Advisor Plan Age-Based, Target, and Individual Fund Portfolios by the DFA U.S. Large Cap Value Portfolio. This will be an automatic change, with no action required by account owners. Please review the letter and Program Disclosure Statement Supplement for details.
  2. The tax reform bill signed into law on December 22, 2017 includes several provisions related to 529 plans. The provisions are:
    • Expanded Qualified Higher Education Expenses
      Section 529 of the Internal Revenue Code of 1986, as amended (the “Code”), has expanded, for distributions made after December 31, 2017, the definition of qualified higher education expenses to include expenses for tuition in connection with the enrollment or attendance at an elementary or secondary public, private or religious school. However, the Alabama statute establishing the Plan does not permit such distributions and will need to be modified to permit such distributions. In the event that the Alabama statute in the future authorizes such distributions, the Plan and this Program Disclosure Statement will be further supplemented. In the event the Alabama statute is modified to permit such distributions, such distributions from all qualified tuition programs with respect to a beneficiary during any taxable year shall, in the aggregate, not include more than $10,000 in expenses for such tuition incurred during the taxable year in connection with the enrollment or attendance of the beneficiary at an elementary or secondary public, private or religious school. You should always consult with your tax advisor regarding your individual situation.
    • Rollovers to ABLE Programs from CollegeCounts
      Effective for periods prior to January 1, 2026, you may direct a transfer of money from your Account to an ABLE account (as defined in section 529A(e)(6)) of the Beneficiary or a member of the family of the accounts Beneficiary, subject to the contribution limits for ABLE accounts. Such amounts would count towards the overall limitations on contributions to an ABLE account within a tax year, and any excess amount would be included in the distributee’s gross income as provided under Section 72 of the Code. You should consult with your tax advisor as to the effect for federal and Alabama income tax purposes of a proposed rollover to an ABLE account.

Please review the Program Disclosure Statement Supplement for additional information.

2018-01-10T13:12:10+00:00January 10th, 2018|