Using your 529 plan just got even easier.
Congress passed legislation in December 2015 that made three substantive changes to 529 accounts. The legislation:
- Added items to the list of qualified higher education expenses for which account owners can use funds tax-free. See Qualified Higher Education Expenses.
- Allows account owners to redeposit some distributions without taxes and penalties in certain circumstances. See Redepositing a Refund.
- Changed the method for calculating earnings on distributions for those with more than one account for the same beneficiary. See Calculation of Earnings.
These changes add to the flexibility of 529 plan accounts and make it even simpler for families to save for higher education.