Passed in late December 2019 with bipartisan support, the Setting Every Community Up for Retirement Enhancement (SECURE) Act is the most sweeping retirement bill in more than a decade. In addition to changes to retirement planning, the new law includes enhancements for 529 college savings plans.
The definition of 529 plan qualified higher education expenses now include expenses for fees, books, supplies, and equipment required for the participation in a registered apprenticeship program. www.apprenticeship.gov.
The definition of qualified higher education expenses for 529 plans is expanded to include student loan repayment (principal or interest) on any qualified education loan of a designated beneficiary or a sibling of the designated beneficiary (i.e., those amounts would be withdrawn tax-free). The amount is treated as a qualified expense for loans of any individual and is subject to a lifetime limit of $10,000. A designated beneficiary and a sibling would each be allowed up to $10,000 of qualified education loan repayments as 529 plan qualified distributions.
Siblings may include a brother, sister, stepbrother or stepsister. A 529 plan account owner may change the 529 plan beneficiary at any time without tax consequences. The provision does not appear to directly encompass the repayment of student loan debt incurred by parents on behalf of the designated beneficiary.
Note: Distributions outlined under these provisions are considered qualified under Kansas state statutes. Per KSA 75-643(h) “Qualified higher education expenses” means any qualified higher education expense included in section 529 of the federal internal revenue code of 1986, as amended. Consult a tax advisor about how these changes may impact your personal situation.
Sources https://www.savingforcollege.com/article/new-law-allows-529-plans-to-repay-student-loans
Administered by
Kansas State Treasurer Steven Johnson
Managed by
American Century Investments
©2023 American Century Proprietary Holdings, Inc. All rights reserved.
Before investing, carefully consider the plan's investment objectives, risks, charges and expenses. This information and more about the plan can be found in the Learning Quest Handbook, available by contacting your financial advisor or American Century Investment Services, Inc., Distributor, at 1-800-579-2203, and should be read carefully before investing. If you are not a Kansas taxpayer, consider before investing whether your or the beneficiary's home state offers a 529 plan that provides its taxpayers with state tax and other benefits not available through this plan.
As with any investment, it is possible to lose money by investing in this plan. The value of your Learning Quest account may fluctuate, and it is possible for the value of your account to be less than the amount you invested.
Notice: Accounts established under Learning Quest and their earnings are neither insured nor guaranteed by the state of Kansas, the Kansas State Treasurer or American Century Investments.
This information is for educational purposes only and is not intended as tax advice.
Administered by Kansas State Treasurer Steven Johnson
Managed by American Century Investment Management, Inc.
American Century Investment Services, Inc., Distributor
American Century Investments | 4500 Main Street | Kansas City, Missouri 64111
