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Congress Approves Computers as a Qualified Higher Education Expense for 529 Plans

Dec 19, 2015

The nation's lawmakers passed and the President is presumed to sign the "Protecting Americans from Tax Hikes (PATH) Act of 2015" The passage of this bill qualifies personal computer devices and associated technology and services as "qualified higher education costs" when acquired for usage principally by the recipient of a 529 college savings plan in the course of any years the recipient is enrolled at an eligible university.

The Protecting Americans from Tax Hikes Act of 2015 was designed to extend or completely revitalize a range of federal tax regulations, together with a variety of brand-new tax updates.

"For many years, many 529 plans around the nation, have actually lobbied lawmakers to recognized the purchase of computer as a qualified 529 expense. This is really a fantastic gift idea and in the nick of time for the holidays," stated Jim Forrell, executive director of the 529 college savings plans.

To clear up exactly what this indicates for 529 plans, the new tax law does 3 things:

  • It makes the purchase of laptop computers, computers, and associated technology and services a qualified college cost-- this modification is retroactive for anybody who made a purchase of such products on January 1, 2015 or later.
  • It enables the re-contribution of certified withdrawals from a 529 plan that are later refunded by an eligible university into a 529 plan without tax penalty-- this also is retroactive for anybody who has actually gotten such a refund from a school January 1, 2015 or afterwards.

This updates the accounting guidelines for 529 plans to remove distribution gathering, which relieves difficult record keeping demands for strategy administrators.

Make your computer purchases by the end of the year to get in on this for 2015.

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